One more consideration that could save you money - since you never actually rented out the property before selling it, you might want to double-check whether this qualifies as an investment property at all for tax purposes. The IRS generally requires that property be "held for productive use in a trade or business or for investment" to qualify for capital gains treatment. Since you purchased with the intent to rent but never actually did due to circumstances beyond your control, you should be fine. However, some aggressive IRS agents might try to argue this was personal property, especially given the short holding period. To strengthen your position, make sure you document your original investment intent - save any emails, texts, or notes about rental market research you did, listing the property on rental websites, communications with property managers, etc. Even though you never completed a rental, showing clear evidence of your investment intent helps establish this as investment property rather than personal use property. This documentation becomes especially important if you ever face an audit, since the distinction affects both your ability to claim the renovation expenses in basis and potentially the tax rates applied to any gains.

This is a complex situation but you're definitely on the right track thinking about including those renovation costs in your basis! A few additional points that might help: First, regarding documentation - while 65% receipts is actually pretty good, don't forget about bank records, loan statements, and even photos you might have taken during renovation. The IRS accepts various forms of proof, and contemporaneous photos showing the work being done can be surprisingly helpful in supporting your expense claims. Second, since you mentioned the property was in your personal name and you have another rental property, make sure you're treating this consistently with your other real estate investments on your tax returns. The IRS likes to see patterns of investor behavior. Also, consider whether any of those renovation expenses might qualify for specific tax benefits beyond just adding to basis. For example, if you installed energy-efficient systems, there might be additional credits available even though you sold before renting. Finally, given the complexity and the significant dollar amounts involved (potentially saving thousands in capital gains tax), this might be worth a consultation with a tax professional who specializes in real estate. They can review your specific situation and ensure you're maximizing all available benefits while staying compliant with IRS requirements. The silver lining is that even though your plans changed, the tax treatment should still work in your favor as long as you document everything properly!

I went through a very similar situation last year with even larger wash sale amounts and completely panicked thinking I owed way more in taxes than expected. After reading through all the helpful responses here, I can confirm what everyone is saying is correct. The key insight that finally clicked for me was understanding that wash sales don't create additional taxable income - they just defer losses to future tax years. Your brokerage has already done all the complex math to arrive at that net gain figure of $55,786.95, which includes all the wash sale adjustments. One additional tip I learned the hard way: if you're planning to do any tax-loss harvesting near year-end, be very careful about the 30-day wash sale window extending into the new year. I accidentally triggered some wash sales in early January that affected my prior year's return, and I didn't realize it until I was already filing. Also, definitely keep detailed records of all your trades. The IRS explanations are confusing, but having a paper trail makes everything much clearer if you ever need to review the calculations or face an audit. Your $55,786.95 net gain is what you'll report on Schedule D - that's it!

I just wanted to add my perspective as someone who went through almost the exact same confusion last year. The numbers on your 1099 can be really intimidating at first glance - I remember staring at mine thinking "how is there a net gain when my cost basis is higher than my proceeds?!" The wash sale mechanism is actually working in your favor here, even though it's confusing. Those $373k in disallowed losses aren't disappearing - they're being added to the cost basis of your replacement shares. So when you eventually sell those shares (without triggering another wash sale), you'll get to claim those losses then. Think of it this way: the wash sale rule prevents you from claiming a loss and then immediately buying back the same position to capture that loss for tax purposes while maintaining the same investment exposure. Instead, it defers that loss until you actually reduce your position in that security. Your brokerage has done all the heavy lifting here. Just report that $55,786.95 net gain on Schedule D and you're all set. The wash sale calculations are already baked into that number. One practical tip: if you're planning to do any year-end tax planning or loss harvesting in the future, try to avoid buying back the same securities for at least 31 days to avoid these wash sale complications altogether.

Great question! You're mostly correct about economic nexus thresholds - staying under $100k in sales or 200 transactions typically means you don't need to collect sales tax in most states. However, there are a few important things to keep in mind: 1. **Home state physical nexus**: You'll still need to collect sales tax for customers in your home state regardless of your sales volume, since you have physical presence there. 2. **Etsy handles most of it**: Since you're selling on Etsy, they actually collect and remit sales tax for you in most states under marketplace facilitator laws. This is a huge advantage and simplifies things significantly. 3. **Keep records**: Even though you're under the thresholds now, it's good practice to track your sales by state so you'll know when you're approaching any limits if your business grows. 4. **Product taxability**: Handmade jewelry is generally taxable, but it's worth double-checking your specific state's rules since some have exemptions for certain handcrafted items. At your expected sales volume of $2,500-3,000, you're definitely safe from economic nexus in other states. Just make sure you understand your home state's requirements for small sellers - some states have minimum thresholds or simplified processes for micro-businesses.

For craft exemptions, unfortunately they're pretty rare and vary widely by state. A few states like New Hampshire have broader exemptions for certain handmade items sold at craft fairs, but these typically don't extend to online sales. Most states treat handmade goods the same as any other retail product for sales tax purposes. The "simplified processes" I mentioned usually refer to things like: - Quarterly instead of monthly filing for small sellers - Simplified registration forms - Lower or waived registration fees - Streamlined reporting (some states let you file annual returns if you owe less than a certain amount) For example, some states don't require you to register for a sales tax permit until you hit a certain threshold like $1,000 in annual sales. Others have "occasional seller" exemptions for very small volumes. Your best bet is to check your specific state's department of revenue website for "small seller" or "micro-business" programs. They're getting more common as states recognize the burden on tiny businesses. Given your candle business size, you might qualify for some of these simplified options even if you need to collect tax.

Don't forget about the American Opportunity Tax Credit (AOTC) if you're pursuing your undergraduate degree! It's worth up to $2,500, and the best part is that up to $1,000 of it is REFUNDABLE - meaning you can get it back even if you don't owe any taxes. This is separate from the Child Tax Credit. The key with education credits and taxable grants is how you allocate your expenses. You can choose to allocate your Pell Grant to living expenses instead of tuition, which makes it taxable income BUT then lets you claim the AOTC on your tuition expenses. This is often better mathematically!

Quick tip that saved me huge last year as a single mom with Pell grants - file as Head of Household! The standard deduction is much higher ($20,800 for 2024 tax year) than filing single. Since you're unmarried, pay more than half the cost of keeping up a home, and have a qualifying dependent living with you for more than half the year, you should qualify.

Carmen, congratulations on your landscaping business doing well! For your $8,500 trailer purchased in November, you have a couple of great options. Since you placed it in service in 2023, you can take 80% bonus depreciation, which would give you an immediate deduction of $6,800. The remaining $1,700 would be depreciated over 5 years using regular MACRS. Alternatively, you could elect Section 179 and deduct the full $8,500 immediately if your business has enough profit to absorb the deduction. The key difference is that Section 179 requires business income to use, while bonus depreciation can create a loss. You'll need to file Form 4562 (Depreciation and Amortization) with your tax return regardless of which method you choose. Make sure to keep detailed records showing 100% business use, including a mileage log if you ever use your personal vehicle to tow it. Given that your business is doing well, either option could work great for you. The choice often comes down to whether you want to maximize this year's deduction or spread some of it out for future years. Definitely worth discussing with your accountant when they return!

Carmen, you've got some excellent advice here already! Just wanted to add one practical tip from my experience with equipment purchases - make sure you have clear documentation that the trailer was "placed in service" in November 2023. The IRS considers equipment placed in service when it's ready and available for its intended use, not necessarily when you first used it. Keep your purchase receipt, any delivery documents, and ideally some photos or records showing when you first had it available for business use. I learned this lesson when I bought equipment in December but couldn't use it until January due to weather - the IRS considered it placed in service the following year, which affected my depreciation timing. Also, since you mentioned this is your first major business purchase, consider setting up a simple asset tracking system now. It'll make future tax seasons much easier when you have multiple pieces of equipment to track. A basic spreadsheet with purchase dates, costs, depreciation methods, and business use percentages will save you hours later!