Great question about tracking expenses for your flip! I went through this same situation last year with my one-time flip. One thing I learned that might help you - make sure to separate out any expenses that happened after you finished the renovation work. For example, if you're paying utilities while showing the house to potential buyers, those become selling expenses rather than basis additions. But utilities during active construction/renovation definitely add to your basis. Also, don't forget about some of the smaller expenses that can add up - things like permits, inspections, dumpster rentals, and even mileage to/from the property for renovation purposes. I kept a detailed spreadsheet with dates and categories which made tax time much easier. One last tip: if you're doing any of the work yourself, you can't add the value of your own labor to basis, but you can add the cost of materials you purchase. Keep those receipts organized by room or project type - it really helps if you ever need to explain your basis calculation to the IRS.

Just want to add another perspective on this since I handled a similar flip situation recently. One thing that caught me off guard was documentation requirements - the IRS really wants to see clear evidence that expenses were truly for improvement rather than maintenance. For your loan interest question, yes it can typically be added to basis, but make sure you can show the loan was specifically for acquisition or improvement costs. If you took out a HELOC on another property to fund this flip, that interest might be treated differently. Also, regarding the utilities during renovation - I learned the hard way that you need to be able to demonstrate the property was uninhabitable during that period. I had to provide photos showing active construction, contractor invoices with dates, and utility bills to prove the timeline. The IRS agent I spoke with said they see people try to claim regular occupancy utilities as improvements, so they scrutinize this area. One expense category you didn't mention but might apply: if you had to get any special permits, environmental testing, or surveys, those definitely add to your basis. Same with any professional fees for architects or engineers if you did structural work. Keep everything organized by month and take lots of photos throughout the process - it really helps establish the timeline if you ever need to justify your basis additions!

For future reference, always schedule tax payments at least 2-3 days after you expect to have the funds. The IRS doesn't actually care what day you schedule it as long as it's by the due date. Better safe than sorry!!!

I've been in this exact situation before and it's so stressful! One thing that helped me was calling the IRS directly to see if I could change the withdrawal date. If you call early in the morning (like right when they open), you might have better luck getting through. The automated system lets you modify scheduled payments up to 2 business days before the withdrawal date in some cases. Also, even if your paycheck and the IRS withdrawal are scheduled for the same day, banks usually process direct deposits (like paychecks) in the early morning hours before they process outgoing ACH withdrawals. So there's a decent chance your paycheck will hit first, but it's definitely not guaranteed and varies by bank. If you can change the date even by one day, I'd highly recommend it for peace of mind!

This is exactly the type of complex basis calculation that trips up so many people with inherited property. Just to add one more important consideration - make sure you also factor in any depreciation that may have been claimed on the property during the life estate period. If the second wife ever rented out the property or used any portion of it for business purposes during her life estate, any depreciation claimed would reduce the basis for the remaindermen. This is something people often overlook, but it can significantly impact your capital gains calculation. Also, since you mentioned the property values increased dramatically in your area, you might want to document the local market conditions and any major developments that occurred between 2009 and 2023. While it won't change your basis calculation, having this context can be helpful if the IRS ever questions why there's such a large difference between your basis and the sale price. The good news is that with proper documentation of the 2009 FMV and any qualifying improvements made afterward, you should have a solid foundation for your tax return.

I'm dealing with a very similar situation right now with my father's property that had a life estate for his second wife. One thing I learned from my tax attorney that might be helpful - make sure you get a formal estate tax return filed (Form 706) even if the estate wasn't large enough to require it, because this officially establishes the stepped-up basis values with the IRS. In our case, we filed the return even though the estate was under the filing threshold, and it created an official record of the property's fair market value at the date of death. This gives you much stronger documentation if you're ever audited, since the IRS has already accepted those values. Also, don't forget to check if your state has any additional requirements for basis step-up. Some states handle inherited property differently than federal law, which could affect your overall tax liability when you file both federal and state returns. The key thing I've learned is that with life estates, the IRS really scrutinizes the basis calculations because of the potential for large gains, so having rock-solid documentation from day one is crucial.

Has anyone ever tried figuring out the original basis by looking up the county property appraiser's website? My uncle's original purchase documents were destroyed in a flood, but I was able to find his original purchase price by searching the county records online. Many counties have this info digitized now and searchable by address.

I'm dealing with almost the exact same situation right now with my father's property! He added me and my sister to the deed about 18 months before he passed, and we just sold it last month. One thing that really helped me was getting a professional appraisal of the property as of the date of death - this gave me the stepped-up basis value for the inherited portion. It cost about $400 but was totally worth it for the tax accuracy. The appraiser was also able to provide documentation that the IRS would accept if I ever got audited. Also, don't forget to look for any capital improvements your mom made beyond just the kitchen renovation. Things like new flooring, roof repairs, HVAC upgrades, even major plumbing work can all add to the basis. I found receipts in my dad's files for stuff I didn't even remember him doing. One more tip - if you can't find all the improvement receipts, some contractors keep records for years and might be able to provide copies if you remember who did the work. Good luck with everything - this stuff is so stressful but you'll get through it!

Has anyone used TurboTax for reporting SSDI backpay with attorney fee discrepancies? I'm wondering if the standard software can handle this complex situation or if I need something more specialized.

I'm dealing with a very similar situation right now! My SSDI backpay 1099-SSA shows attorney fees that exceed the federal cap, and it's been a nightmare trying to get it resolved. One thing I learned that might help: make sure to keep detailed records of ALL your communications with SSA about this overpayment issue. I started a simple spreadsheet tracking every phone call, case number, and representative I spoke with. This documentation has been invaluable when explaining the situation to tax preparers. Also, don't wait on SSA to fix their records before filing your taxes if you're up against deadlines. As others mentioned, you can report the correct income amount and use Form 8275 to explain the discrepancy. The key is having solid documentation showing what the actual attorney fee should be versus what's reported. The stress is real - I know exactly how you're feeling. But from what I've researched and experienced, the IRS is actually pretty understanding about these SSA reporting errors as long as you're transparent about the discrepancy and provide supporting documentation.