Just wanted to add another perspective on this since I work in tax prep and see these situations regularly. While the gift strategy and Roth conversion are both solid options, there's one more thing to consider: the timing of your house purchase. If you're planning to buy a house in the near future (within the next 1-2 years), you might want to think about spreading the capital gains realization across multiple tax years rather than doing it all at once. Even with your wife's 0% bracket, there are limits to how much can fit in that bracket each year. For 2025, the 0% capital gains bracket for married filing separately goes up to $47,025 in taxable income. So if your wife has earned income plus the capital gains, make sure the total doesn't push her into the 15% bracket. You could potentially do partial sales over 2025 and 2026 to maximize the 0% treatment. Also, don't forget about the net investment income tax (NIIT) - though at her income level it's probably not a concern, it's worth double-checking if you're doing large conversions or sales. The Roth conversion really is looking like your best bet given the simplicity and the fact that you're building long-term wealth. Sometimes the path of least resistance is also the smartest one!

Another approach to consider is using your wife's lower tax bracket for strategic Roth IRA contributions instead of conversions. If she has earned income but has been maxing out retirement contributions elsewhere, you could potentially have her contribute to a Roth IRA directly (up to $7,000 for 2025, or $8,000 if she's 50+) using funds from your joint finances. This bypasses the complexity of transferring securities entirely while still taking advantage of her favorable tax situation. The money going into the Roth is after-tax at her lower rate, and all future growth is tax-free. If she doesn't have enough earned income to maximize IRA contributions, then the traditional IRA to Roth conversion strategy others mentioned becomes even more attractive. You could potentially do both - maximize her direct Roth contributions AND convert some traditional IRA funds, depending on how much room she has left in her lower tax brackets. This way you're building tax-free retirement wealth while avoiding any potential complications with securities transfers between spouses. Sometimes the retirement account strategies are overlooked when people focus on the capital gains planning, but they can be just as valuable for tax optimization.

Has anyone else noticed that TurboTax sometimes asks for forms you don't actually need? Last year it had me fill out some crypto tax form even though I had zero crypto transactions. After talking with a tax professional, I learned you can sometimes override these prompts.

This is such a common issue with first-time filers! The key thing to understand is that Form 8615 (kiddie tax) is triggered by three main factors: age, student status, and the type/amount of income you have. Since you're 20 and a student (even part-time), TurboTax is being cautious and asking about the form. But you likely don't need it if: 1. Your scholarship money was used only for qualified expenses (tuition/books) - which sounds like your case 2. You provide more than half your own support through your job income The "support test" is crucial here. Add up ALL your expenses for the year (rent, food, tuition not covered by scholarships, books, clothes, etc.) and see if your café job income covers more than 50% of that total. If yes, you're exempt from kiddie tax rules. When TurboTax asks the support questions, be very careful with your answers. It sounds like you're working while in school and likely supporting yourself, so make sure you're answering those questions accurately. The software should then skip the Form 8615 requirement. Don't let this stress you out too much - it's just TurboTax being overly cautious based on your age and student status!

Has anyone used H&R Block instead of TurboTax for this? I'm wondering if one handles these 409A adjustments better than the other.

I just went through this exact same situation with my RSU sales from last year! The confusion around adjustment codes is so real. What helped me was understanding that the key is avoiding double taxation - since the income from your stock compensation was already reported on your W-2, you need to adjust your basis on the 1099-B to reflect that. For most RSU situations like yours, you'll likely use adjustment code "B" as others mentioned. But here's a tip that saved me a lot of time: before you finalize anything in TurboTax, print out or save a PDF of your tax return and review the Schedule D to make sure your gains/losses look reasonable. If you see huge gains that don't match what you expected, you probably need to double-check your adjustment amounts. Also, if you have any ESPP transactions mixed in with your RSUs, those might need different codes depending on whether they were qualifying or disqualifying dispositions. The supplemental documents that ApolloJackson mentioned are golden for this - definitely hunt those down if you haven't already!

I had this exact same situation last year and was pulling my hair out trying to understand those 1099-DIV instructions! The confusion comes from how the IRS worded that exception - it's really poorly written. Here's what I figured out after doing way too much research: When they say "may be able to report" on Form 1040, that option completely disappears the moment you have ANY other capital gains or losses. Even a single stock sale from another brokerage means you must use Schedule D for everything. Think of it this way - the IRS created a simple shortcut for people who ONLY receive capital gain distributions from mutual funds/REITs and have no other investment activity. But once you start buying and selling individual stocks, you're in the "complex" category and have to use the full Schedule D process. Your Box 2a amount will go on Line 13 of Schedule D as a long-term capital gain distribution, and all your stock sales will be reported on the appropriate lines based on their holding periods. There's no tax difference between the methods - it's just about following the correct reporting requirements for your situation.

I went through this exact same headache with my 1099-DIV last year! That "may be able to report" language is so confusing because it makes it sound like you have a choice when you really don't. Here's the bottom line: since you have capital gains from stock sales through other brokerages, you MUST use Schedule D for everything. The shortcut to report Box 2a directly on Form 1040 is only available if those capital gain distributions are literally your ONLY capital gains for the entire year. The IRS created that simplified reporting option for people who just hold mutual funds or REITs and never buy/sell individual stocks. But the moment you have any other capital gains activity, you lose that option entirely. Your Box 2a amount goes on Line 13 of Schedule D, and there's no tax advantage either way - it's just about following the correct reporting format. The total tax you'll pay will be exactly the same regardless of which method you use. Don't overthink it - just put everything on Schedule D and you'll be good to go!

I'm so sorry for your loss, Andrew. Going through estate administration while grieving is incredibly difficult, and you're smart to ask these questions upfront. Everyone here has given you excellent advice about the CTR process being routine and the importance of avoiding structuring. I just wanted to add that as an executor, you should also check if your state requires any additional reporting for cash assets found in the estate. Some states have their own inheritance or estate tax forms where you'll need to list all assets, including cash found in the home. Also, don't forget to get a receipt from the bank for the deposit and keep it with your estate records. The probate court will likely want to see documentation of all estate assets and how they were handled. Having that paper trail will make the final accounting much smoother when you close the estate. You're handling this exactly right by being transparent and asking the right questions. The hardest part of being an executor is often just knowing what questions to ask, and you're clearly on the right track.

Andrew, I'm sorry for your loss. As a tax professional, I want to reinforce what others have said - definitely deposit the full $12,500 at once and don't try to break it up. The CTR filing is truly routine administrative work for banks. One additional consideration for executors: make sure you're keeping detailed inventory records of all estate assets for the final tax returns. Cash found in the home needs to be reported on Form 706 (if the estate is large enough) or your state's estate tax return. The IRS values cash at face value as of the date of death, so that $12,500 will be listed at exactly that amount. Also, if your grandmother had been avoiding banks and keeping large amounts of cash, there might be unreported income issues to consider. You may want to review her final tax returns to ensure everything was properly reported. As executor, you could be responsible for filing amended returns if needed. The transparency you're showing by asking these questions and planning to deposit everything properly is exactly the right approach. Keep documenting everything and you'll be fine.