I went through something similar with another bankrupt stock last year. One thing that helped me was creating a simple spreadsheet documenting everything - purchase date, amount invested, bankruptcy filing date, final liquidation date, and any final payments received. This made it much easier when filling out Form 8949. Also, don't forget that if your capital losses exceed $3,000 for the year, you can carry forward the remaining losses to future tax years. With a $2,681 loss ($2,700 - $19), you'll likely be able to use some of it to offset future gains or continue deducting $3,000 annually until it's exhausted. Keep all your brokerage statements and any communications about the bankruptcy - the IRS could ask for documentation if they have questions about your worthless security deduction.

One additional tip that saved me a lot of headache - make sure to report this as a capital loss, not an ordinary loss. I initially tried to claim my worthless stock as an ordinary business loss since I considered myself an "active trader," but the IRS will almost certainly classify individual stock investments as capital transactions unless you're a registered securities dealer. This means your $2,681 loss from BBBY will be subject to the capital loss limitations (up to $3,000 per year against ordinary income), but the good news is any unused portion carries forward indefinitely. Given the size of your loss, you'll likely be able to use it all within a year or two. Also, double-check that you're reporting this in the correct tax year. Since BBBY went through bankruptcy in 2023, this loss should be claimed on your 2023 tax return, not 2024, even if you're just now preparing your taxes. The worthless security rules are based on when the stock became worthless, not when you "realized" or documented the loss.

Did your grandfather's estate go through probate? Just wondering because my uncle left me money but the estate is still in probate and i haven't gotten anything yet. It's been like 8 months!

Just wanted to share my experience since I went through something similar last year. My grandmother left me about $52,000 and I was panicking about taxes too. The good news is that everyone here is right - you don't owe federal income tax on the inheritance itself. However, make sure you keep good records of when you received it and the amount. While you won't need to report it as income, it's good documentation to have. Also, if you decide to invest that money, keep track of your original $47,000 so you know your basis for any future investments. One thing that helped me was setting aside a small portion in a separate savings account just for any potential tax obligations on future earnings from the inheritance. That way I'm not tempted to spend money I might owe taxes on later. California doesn't have inheritance tax like you mentioned, so you're all set there too. Congratulations on the inheritance - I'm sure your grandfather would be happy knowing it's helping you!

This thread has been incredibly helpful! I'm also a student who just got invited to Amazon Vine and was completely overwhelmed by the tax implications. Reading through everyone's experiences has made me feel much more confident about participating. A few key takeaways I'm getting: 1. Keep detailed records from day one (screenshots of tax values, spreadsheet tracking) 2. Set aside money throughout the year for potential taxes (15-25% suggestion seems smart) 3. Even amounts under $600 technically need to be reported 4. If you're serious about reviewing, treat it like a business for potential deductions One question I still have - for those of you who've been doing this for multiple years, have you ever been audited specifically related to Amazon Vine income? I'm wondering how common that is and what kind of documentation the IRS would want to see if it happened. Also, does anyone know if there are any changes coming to how Amazon handles the tax reporting for Vine? I've heard rumors that they might start issuing 1099s for smaller amounts, but I'm not sure if that's true. Thanks everyone for sharing your experiences - this community is awesome for helping navigate these confusing tax situations!

I've been in Amazon Vine for about 3 years now and wanted to share a few additional tips that might help newcomers navigate the tax side more smoothly. First, don't panic about the tax implications - yes, it's real income that needs to be reported, but if you're organized about it, it's very manageable. I use a simple Google Sheet with columns for: Date Received, Product Name, Amazon's Tax Value, and Notes. Takes maybe 2 minutes per item to log. Second, here's something I learned the hard way - Amazon's "Estimated Tax Value" can sometimes change between when you order an item and when it arrives. I always screenshot both the order confirmation AND the final tax value shown in my account after receiving the item. This has saved me during tax prep when values didn't match my initial records. Third, if you're a student with minimal other income, you might be surprised at how little tax you actually owe. In my first year, I received about $1,200 in products but only owed around $180 in additional taxes because of the standard deduction and my low income bracket. Finally, consider talking to your parents sooner rather than later if they claim you as a dependent. Mine were initially worried but became supportive once I showed them my organized tracking system and explained the potential tax impact. Having their buy-in makes tax season much less stressful. The program really is worth participating in if you enjoy writing detailed reviews - just stay organized from day one!

As someone who just went through their first year dealing with significant LTCG and AMT, I can confirm that the exemption phase-out is indeed the main trap. What caught me off guard was how quickly you can go from "no AMT impact" to "substantial AMT liability" once you cross those thresholds. One thing I learned that might help others: if you're close to the phase-out threshold, consider bunching charitable contributions into the high-income year. Since charitable deductions are allowed under both regular tax and AMT (unlike state tax deductions), this can be an effective way to reduce your AMTI without triggering the preference adjustments that cause AMT in the first place. Also, for those dealing with stock options or RSUs, remember that the timing of when you sell the shares is separate from when the compensation income hits (at vesting). You can have AMT liability from the vesting even if you don't sell, which complicates the multi-year planning strategies discussed here. I made the mistake of only focusing on when I'd sell shares, not when the vesting income would hit my tax return. The state tax angle several people mentioned is crucial. Even in states that generally follow federal AMT rules, there can be subtle differences in exemption amounts or phase-out thresholds that matter when you're doing precise planning around those cutoff points.

This thread has been incredibly enlightening! As someone new to dealing with substantial capital gains, I've been trying to wrap my head around AMT implications and this discussion has clarified so much. What really clicked for me is understanding that LTCG don't get taxed at the 26%/28% AMT rates - they keep their preferential rates but can trigger AMT by pushing you over the exemption phase-out thresholds. The original post's framework was helpful, though as others noted, the 2025 numbers are higher. I'm particularly grateful for the real-world examples everyone shared. The $8,000 mistake from not considering state taxes, the charitable contribution bunching strategy, and the distinction between vesting and selling timing for stock compensation - these are exactly the kinds of practical insights you can't find in tax guides. One question I have: for those using multi-year planning to stay under AMT thresholds, how do you handle the risk of tax law changes between now and when you plan to realize gains? I'm looking at potentially spreading stock sales over 2-3 years, but I'm nervous about betting on current AMT exemption amounts and phase-out thresholds staying the same. Also, has anyone found that financial advisors or CPAs are generally well-versed in these AMT/LTCG interactions, or is this something you've had to research largely on your own? The complexity everyone's describing makes me think specialized expertise might be worth paying for.

Has anyone actually tried setting up a Roth IRA for a minor? Which companies make this easy? My son is interested but I'm not sure where to start with the actual account setup.

Great question! I've been researching this exact scenario for my own kids. The key distinction the IRS makes is between "chores" (which are considered part of normal family responsibilities) and legitimate business activities. For your specific situation with the $20 lawn mowing, if it's just your family's lawn as part of regular household chores, it typically won't qualify as earned income for IRA purposes. However, there are a few ways to make this work legitimately: 1. Help your son start an actual lawn service business where he services multiple properties in the neighborhood, not just yours. This creates genuine self-employment income. 2. If you have a business (even a side business), you could formally employ him to do lawn maintenance, office cleaning, or other legitimate business tasks at reasonable wages. 3. Consider other entrepreneurial opportunities - many teens successfully run small businesses like pet sitting, tutoring younger kids, or selling items they make. The important thing is that the work and payment need to have genuine business purpose beyond just family chores. Once he has legitimate earned income, he can contribute up to 100% of that income to a Roth IRA (up to the annual limit of $7,000 for 2025). Keep detailed records of any payments and work performed. This early start on retirement savings is an amazing gift - compound interest over 50+ years will be incredible!