Has anyone used TurboTax or H&R Block for filing estate tax returns? I'm wondering if the software can handle Form 1041 or if I should just hire a professional.

I went through this exact situation when my mother passed away last year. Based on what you've described, you'll definitely need to file Form 1041 since the estate had income from the house sale and the CD interest that exceeded $600. A few important points to remember: 1. The house sale will likely qualify for stepped-up basis, meaning the estate's "cost" for tax purposes is the fair market value on the date of your dad's death, not what he originally paid. This could significantly reduce or eliminate the taxable gain. 2. Make sure to get a professional appraisal of the house as of the date of death if you don't already have one - you'll need this to establish the stepped-up basis. 3. The estate's first tax year can end on December 31st of the year of death, or you can choose a fiscal year ending up to 12 months after the date of death. This gives you flexibility on when the first return is due. 4. Don't forget that if you distribute any income to beneficiaries during the tax year, you'll need to prepare Schedule K-1s for them. The good news is that with the stepped-up basis, you may owe very little or no tax on the house sale. I'd recommend consulting with a CPA who has estate experience, especially for the first year - the peace of mind is worth it.

Just want to add that while LLCs don't change how rental income is taxed on your personal return, they DO provide valuable liability protection. I have 3 rentals each in separate LLCs to protect my personal assets and to prevent a lawsuit on one property from affecting the others. For tax purposes, I still file everything on Schedule E since my LLCs are single-member and disregarded for tax purposes. But the legal protection is worth the annual LLC fees in my state ($125/year per LLC in my case).

One thing nobody's mentioned yet - if your overall rental losses are limited by the passive activity rules, those losses aren't lost forever! They get suspended and carried forward to future tax years when you either: 1. Have passive income to offset them against 2. Dispose of the entire passive activity in a fully taxable transaction I had suspended losses building up for years that I was finally able to use when I sold one of my properties last year. It significantly reduced my tax bill on the sale!

Make sure you're still filing your annual S Corp return (Form 1120-S) even with no income! I made this mistake my first year and got hit with a penalty. The S Corp election requires you to file the return regardless of activity.

I'm dealing with this exact situation right now! Thanks for posting this question. From all the responses here, it sounds like the consensus is clear - no need to file Form 941 until you actually start paying wages. I'm particularly interested in the Form 8822-B suggestion from @Natalia Stone. That seems like a smart proactive step to avoid any confusion with the IRS down the road about "missing" 941s. One thing I'm still unclear on though - when we do eventually start paying ourselves as S Corp owners, what constitutes "reasonable compensation"? I know the IRS requires it, but I'm worried about setting it too high or too low. Has anyone found good guidance on this? Also keeping the 1120-S filing requirement in mind - definitely don't want to miss that even with zero income!

When I started my gaming channel last year, my accountant told me to open a separate savings account and immediately transfer 30% of every payment I received into it. This system has worked perfectly for me - I never feel the sting of tax payments because the money never felt like it was "mine" to begin with. Also, get a good expense tracking app right away! I use one that lets me take pictures of receipts and categorize them immediately. Makes tax time so much easier and ensures you don't miss deductions.

Great advice from everyone here! I'm also new to content creation taxes and was overwhelmed at first. One thing I'd add is to consider using a business credit card for all your content-related expenses right from the start. It makes tracking so much easier since everything is automatically separated from your personal spending. Also, don't forget that you can deduct a portion of your home if you use a dedicated space for filming/editing (home office deduction). Even if it's just a corner of your bedroom where you set up your camera and lighting, that square footage can be deductible. The 25-30% savings rule mentioned above is solid, but I'd recommend starting at 30% until you get a feel for your actual tax situation after your first year. Better to have extra money sitting in that tax savings account than to come up short!

One thing to keep in mind is that you'll want to document everything really well. Since you inherited these cards, make sure you have copies of any estate documents, death certificates, and ideally get a professional appraisal done close to the date of inheritance to establish that stepped-up basis everyone's mentioning. I'd also suggest keeping detailed records of any selling expenses (auction fees, shipping, etc.) since those can be deducted from your capital gains. And if you're planning to sell a lot of cards, consider spreading the sales across tax years to manage your tax bracket - especially important given that collectibles cap out at 28% instead of the usual 20% for other investments. The good news is that inheritance tax planning is usually more favorable than other situations, so you're starting from a good position!

Another thing to consider is timing your sales strategically. If you're planning to sell a large collection, you might want to spread the sales across multiple tax years to avoid pushing yourself into a higher tax bracket all at once. This is especially important with collectibles since they can be taxed at up to 28%. Also, don't forget to track all your selling expenses - things like auction house commissions, eBay fees, shipping costs, and even the cost of protective sleeves or cases for shipping. These are all deductible against your capital gains and can add up to meaningful savings. If some of the cards turn out to be worth significantly less than their value at inheritance (market conditions change, condition issues, etc.), you might actually have capital losses you can deduct. Just make sure you have good documentation of both the original inherited value and the actual selling price. One last tip - if you're not sure about the tax implications of a particular sale, consider consulting with a tax professional who has experience with collectibles. The rules can be tricky and the potential tax savings from proper planning often more than pay for the consultation fees.