Has anyone actually used intercompany transactions to save on taxes? Like could you charge higher rates from your profitable company to your less profitable one to shift where the income shows up? Asking for a friend lol

Great question! I went through something very similar when I restructured my business last year. The key thing to remember is that these intercompany transactions are totally legitimate as long as you're treating them like you would with any unrelated third party. Since you mentioned you're paying market rates between Company Beta and Company Gamma, that's exactly what the IRS wants to see. The technical term is "arm's length pricing" - basically, would you charge the same amount to a completely unrelated company for the same work? A few practical tips from my experience: - Keep detailed invoices and contracts between the companies, just like you would with external vendors - Document how you determined your pricing (market research, competitor analysis, etc.) - Make sure each company has separate bank accounts and maintains its own books - Consider getting a few quotes from outside developers occasionally to validate your internal rates The fact that you have separate EINs and legitimate operations for each company is perfect. The IRS isn't trying to stop legitimate business structures - they just want to make sure companies aren't artificially shifting profits around to avoid taxes. Since your setup sounds legit and you're using fair pricing, you should be good to deduct those expenses normally.

Good news about the CP12 notice! That means you're getting a bigger refund than expected, which is always nice. The IRS found a math error in your favor and corrected it automatically. Since you received the CP12, your refund should be processed within 4-6 weeks from the date on the letter. The fact that it's been 2 weeks already means you're probably halfway there. The "Where's My Refund" tool should show more specific timing once they actually approve and send the refund. CP12 notices are pretty straightforward - no action needed on your part unless you disagree with their correction (which you probably don't since it's more money!). Your grandma was right that it means a refund is coming, she just didn't know about the timeline.

Just wanted to add that CP12 notices are actually one of the better IRS letters to receive! Since yours shows they found a math error that increased your refund by $130, that's essentially free money you weren't expecting. I've gotten a few CP12 notices over the years and the timeline is usually pretty consistent - about 4-6 weeks from the letter date. The IRS has to go through their internal processing steps even after they send the notice, which is why there's still a wait time. One tip: if you have direct deposit set up, make sure your bank account info hasn't changed since you filed. Sometimes refund delays happen because the IRS tries to deposit into an old or closed account. You can verify this info through the "Where's My Refund" tool on their website.

For anyone dissolving a C-corp soon - remember that timing can be crucial for tax purposes! We intentionally delayed our liquidation to January so the tax impact hit in the following year. This gave shareholders more time to plan for the capital gains taxes. Also, if your corporation has accumulated E&P (earnings and profits), distributions will be taxed as dividends until E&P is exhausted, before being treated as return of capital. This sequencing can significantly impact the tax treatment of your liquidation. You must exhaust your E&P through dividend distributions before you can distribute amounts that are treated as return of capital or liquidation proceeds.

One important detail that hasn't been mentioned yet - when completing Form 5452 for liquidation distributions, make sure you're consistent with how you report the distributions across all shareholders AND on the corporation's final Form 1120. The IRS will cross-reference these forms, so if you report $X as liquidation distributions on Form 5452, that same amount should appear on the corporation's final return. Also, remember that the corporation must provide each shareholder with their Form 1099-DIV by January 31st following the year of liquidation - these forms will show the liquidation distribution amounts in box 8 or 9. A common mistake is forgetting to file Form 966 within 30 days of adopting the plan of liquidation. This is separate from Form 5452 and is required even for small family corporations. The IRS can impose penalties if Form 966 is filed late, so don't overlook this step in your dissolution timeline.

Pro tip for anyone dealing with Form 8960: Take a close look at line 8 where you can deduct properly allocable deductions. Many people miss that investment interest expense, investment advisory fees, and expenses related to rental properties can often be used to reduce your NIIT liability. I saved almost $700 last year by properly accounting for these deductions!

Just wanted to share my experience as someone who went through this exact situation last year. You're absolutely right that capital gains from stock sales go on line 5a of Form 8960 - that's the correct line for net gain from disposition of property. One thing that caught me off guard was that the NIIT applies to your net investment income OR the amount by which your MAGI exceeds the threshold, whichever is LESS. So even if you have significant capital gains, if your total MAGI is just barely over the $200k threshold, you might only owe the 3.8% tax on a small portion. Also, don't forget to check if you have any investment expenses that can reduce your NIIT liability on line 8. Things like investment advisory fees, safe deposit box fees for storing investment documents, or expenses related to managing rental properties can often be deducted here. I missed this my first time filing and had to amend! The reason they make it a separate form instead of building it into the capital gains worksheet is because the NIIT applies to all types of investment income (dividends, interest, rents, etc.), not just capital gains. It's annoying but makes sense from a tax code structure perspective.

I actually had a similar situation with a Section 351 exchange last year and want to share what worked for me. After struggling with the same questions you're asking, I ended up creating a comprehensive statement that included all the required elements under § 1.351-3. The key is being very detailed and organized. I structured mine with clear sections: transaction date, all parties involved (with EINs), detailed description of property transferred, fair market values, basis amounts, and securities received. I also included a section documenting any liabilities that were assumed. For the actual filing, I was able to e-file successfully by attaching the statement as a PDF through my tax software's document attachment feature. Most software has this - look for "Supporting Documents" or "Additional Forms" sections. I made sure to reference the statement in my main return with a note like "See attached Section 351 statement" so the IRS would know to look for it. One thing I learned is that it's better to be overly thorough than to leave anything out. The IRS wants to see that you've properly documented the transaction to qualify for tax-free treatment. If you're unsure about any aspect, it's worth consulting with a tax professional who has experience with Section 351 transactions, as getting this wrong could jeopardize the tax-free nature of your exchange.

I've been through this exact process twice now - once for transferring assets to my LLC and again when I incorporated my consulting business. The confusion around § 1.351-3 statements is totally understandable because the IRS doesn't make it clear at all. Here's what I've learned from experience: You absolutely need to create your own written statement since there's no official form. The statement must be titled "Statement Pursuant to § 1.351-3" at the top and include all the regulatory requirements - transaction date, complete party information (names, addresses, EINs), detailed property descriptions with both fair market value and your tax basis, securities received, and any assumed liabilities. For e-filing, every major tax software I've used (TurboTax, H&R Block, TaxAct) has a document attachment feature. It's usually found near the end of the filing process under names like "Supporting Documents," "Additional Forms," or "Attachments." Upload your statement as a clearly-named PDF and reference it in your main return - I typically add a note in the "Other Income" section saying "See attached Section 351 statement." The critical thing is getting this filed with the return for the year your transaction occurred. If you've already filed that year's return, you'll need to submit Form 1040-X with the statement attached. Don't delay on this - the statement is what preserves the tax-free treatment of your Section 351 exchange, and missing it could cost you way more than the hassle of an amended return.