Don't forget about wash sale rules if you're planning to buy back into a similar fund later! If you sell at a loss and buy back within 30 days, you can't claim the tax loss.

Great thread everyone! As someone who's been through this exact situation, I wanted to add a few practical tips for when you actually execute the sale: 1. **Timing matters**: If you're close to the end of the tax year, consider whether it makes sense to delay the sale until January to push the tax liability to the following year's return. 2. **Document everything**: Take screenshots of your lot selection choices and keep records of which specific shares you sold. This will be helpful when you get your 1099-B and need to verify everything matches. 3. **Consider tax-loss harvesting**: Even though you're selling at a gain, check if you have any other investments with losses that you could sell to offset some of the gains. 4. **Emergency fund planning**: Since you're using investments for an emergency, consider rebuilding an actual cash emergency fund once you're back on your feet so you don't have to deal with tax implications next time. The 0% capital gains rate that @Nia Davis mentioned is huge - definitely verify your income situation before selling. You might be in for a pleasant surprise!

idk why everyone makes this so complicated lol just use taxr.ai - it literally tells you everything you need to know about filing old returns. Best $5 I ever spent no cap

Just wanted to add that you should also check if you had any stimulus payments you might have missed in 2021 - those Recovery Rebate Credits can be claimed on your return too! I filed a late 2021 return last year and got an extra $1400 I forgot about. Also make sure to use certified mail when you send it in so you have proof of delivery 📮

One thing to consider - even with a parenting plan that specifies who claims the kids, the IRS will still apply their own tiebreaker rules if both parents claim them. The parenting plan helps show intent and agreement, but the IRS's main concerns are: 1. Where did the kids physically spend the most nights during the tax year? 2. If that's equal, which parent has the higher AGI? I found this out the hard way when my custody agreement said I could claim our daughter, but my ex's house was technically her primary residence (she spent more nights there). The IRS sided with my ex despite our agreement saying otherwise. Also, keep in mind that intentionally disregarding a custody agreement for tax purposes isn't automatically "tax fraud" in the IRS's eyes - it's a dispute about qualification. But repeatedly claiming a dependent when clearly not entitled to could potentially be viewed as a knowing misrepresentation.

I've been through a similar dependent dispute, and from what I've learned, the IRS typically takes 4-12 months to resolve these conflicts. The fact that you received your refund doesn't mean they've made a determination yet - they process returns first, then audit later. A few key points based on my experience: 1. **Documentation is crucial** - You did the right thing including the parenting plan and AGI proof with your return. Keep copies of everything, plus any additional records showing where the children actually lived (school records, medical records, etc.). 2. **The "night test" matters most** - Even with a custody agreement, the IRS will ultimately look at where the children spent the majority of nights during the tax year. If your partner had the kids for more than half the year AND has higher income, you're in a strong position. 3. **Communication timeline** - In my case, it took about 7 months before the other party received an IRS notice. I never got any communication until much later when they confirmed the resolution in my favor. 4. **Fraud vs. dispute** - Unless there's clear evidence of intentional deception (like fabricated documents), the IRS usually treats these as qualification disputes rather than fraud cases. The conflict is already flagged in their system. The waiting is definitely stressful, but it sounds like you've done everything correctly. Just keep your documentation organized and be patient with their process.

Friendly reminder that if you owe taxes for other years, the IRS will automatically apply any refund from 2020 to those outstanding balances. So if you're expecting a refund but have tax debt from other years, don't count on seeing that money.

Just want to echo what others have said about the May 17, 2024 deadline - you really need to act fast! Since you can't e-file 2020 returns anymore, make sure you're using the actual 2020 tax forms (not 2024 forms) which you can download from the IRS website under "Prior Year Products." One thing I haven't seen mentioned yet - if you had health insurance through the marketplace in 2020, make sure you have your 1095-A form to reconcile any advance premium tax credits. Missing this could delay your refund processing significantly. Also, double-check that you're mailing to the correct IRS processing center for your state. The address for paper returns is different from where you'd normally send correspondence, and using the wrong address could cause delays that might push you past the deadline. Good luck getting your refund!

Has anyone mentioned Form 8824? If this distribution is part of a partnership dissolution or restructuring, you might need to report it as a like-kind exchange. I had a similar situation and my CPA insisted we needed this form.

I've been through several partnership property distributions and want to emphasize something that often gets overlooked - make sure you're also considering the impact on the remaining partners' capital accounts and basis adjustments. When property gets distributed, the partnership needs to make corresponding adjustments to all partners' capital accounts under Section 704(b). If you have a Section 754 election in place (which many partnerships forget they have), you'll also need to make basis adjustments to the partnership's remaining assets under Section 734(b). For your Box 19 reporting, beyond what Giovanni mentioned about the basic disclosures, you should also confirm whether the partnership needs to report any Section 734(b) adjustments that affect the other partners. These adjustments can be complex but are crucial for maintaining proper basis tracking going forward. Also double-check your partnership agreement for any special allocation provisions that might affect how this distribution should be treated from a book vs. tax perspective. Sometimes the agreement has specific language about property distributions that can impact the reporting requirements.