I'm so glad you posted this question because I was literally in the exact same boat just a few months ago! Got a Treasury check completely out of the blue and spent days worrying it was some kind of elaborate scam. After reading through all these responses, it sounds like you're dealing with a completely legitimate IRS adjustment refund. The fact that it has proper security features, your correct name and address, and came from the US Treasury are all really good signs. What really convinced me when I was in your situation was learning that the IRS processes literally millions of these adjustment checks every year - it's way more common than most people realize. They're constantly running automated reviews of past returns and catching errors that work in taxpayers' favor. My advice would be to go ahead and deposit it, but definitely keep copies of everything and watch for that explanation notice everyone's mentioned. From what I've read here, it should arrive within 2-3 weeks and will tell you exactly what was adjusted and why. The peace of mind you'll get from finally understanding what the check is for will be totally worth the short wait for the paperwork!

This is such a reassuring thread to read! I actually received an unexpected Treasury check about 2 months ago and went through the same anxiety you're experiencing right now. Mine turned out to be completely legitimate - the IRS had reviewed my 2022 return and found I was eligible for additional education credits that I hadn't claimed. What really put my mind at ease was doing a few quick verification steps before depositing: I checked all the security features (watermarks, microprinting, etc.), confirmed my personal information was correct, and verified the check format matched legitimate Treasury checks I could find examples of online. The explanation notice (CP11 in my case) arrived about 2 weeks after I received the check, just like everyone else has described. It clearly explained which tax year was adjusted, what credits were recalculated, and even included the interest they added for the processing delay. Based on everything you've described - proper security features, correct personal information, and it being from the US Treasury - this sounds exactly like the routine adjustment refunds that the IRS processes constantly. I'd recommend going ahead and depositing it, but definitely keep documentation of everything. The explanation paperwork will arrive soon and clear up any remaining questions you have about where the refund came from!

I went through this exact same situation last year with my 14-year-old daughter who had about $18 in capital gains from a stock split cash payment. After researching extensively and consulting with my CPA, here's what I learned: The IRS Publication 929 does provide some flexibility for "incidental" capital gains when using Form 8814. While the form doesn't explicitly mention regular capital gains, there's guidance that allows including small amounts that don't materially affect the tax calculation. For your $22 gain, I'd recommend including it on Form 8814 line 1a with your daughter's other unearned income. The key factors that support this approach: 1. The amount is less than 1% of her total income 2. It won't change her tax liability in any meaningful way 3. Filing a separate return would create unnecessary administrative burden Just make sure to keep good records showing the 1099-B and your reasoning for including it on Form 8814. In the unlikely event of any questions later, you can demonstrate that you made a reasonable interpretation based on the circumstances. The practical reality is that the IRS isn't going to scrutinize a $22 capital gain on a child's return, especially when it's clearly reported and the family is making a good faith effort to comply with the tax laws.

I just wanted to chime in as someone who's been through this exact scenario multiple times with my three kids over the years. The $22 capital gain from fractional shares is such a common situation now with so many brokerages handling stock splits this way. Here's my take after dealing with this probably 6-7 times: include it on Form 8814. I've never had any issues doing this, and I think the reasoning others have shared here is sound. The IRS has bigger fish to fry than a $22 capital gain on a child's return, especially when you're clearly trying to report everything properly. What I do is keep a simple spreadsheet each year documenting these decisions. For example: "2024 - Daughter Sarah - $22 LT capital gain from XYZ Corp fractional shares included on Form 8814 line 1a due to de minimis amount (0.9% of total unearned income)." Takes 30 seconds and gives you documentation if you ever need it. The key is being consistent and reasonable. If next year she has $500 in capital gains, then I'd file separately. But for these tiny amounts from fractional share payouts? Form 8814 all the way.

Wait I'm still confused about head of household vs. single. I live alone in an apartment I rent and pay all my own bills. Isn't that being the "head" of my own "household"? Why doesn't that count?

Hey Malik! I was in almost the exact same situation when I filed for the first time - moved out, living independently, and totally confused about the whole dependent/head of household thing. The short answer is no, you definitely cannot claim yourself as a dependent on your own tax return. Think of it this way: you're either filing your own return OR you're someone else's dependent, never both. Since you're living alone without any dependents (kids, elderly parents you support, etc.), you'll want to file as "Single" rather than "Head of Household." Head of Household is specifically for people who are unmarried AND supporting qualifying dependents. Don't worry about making mistakes - the tax software will usually catch obvious errors like trying to claim yourself as your own dependent. Just be honest about your situation: you're single, living independently, and supporting yourself. That makes you a "Single" filer, and you'll get the standard deduction for that filing status. The fact that you're being careful and asking questions shows you're on the right track! First-time filing is always overwhelming, but you've got this.

Another option is to request an "Account Transcript" instead of just the wage and income transcript. It shows different info like estimated tax payments you've made, any adjustments or credits from previous years that might carry forward, and other account activity. I usually request both to get the full picture before filing.

Just a heads up - sometimes the wage and income transcript isn't fully updated until later in the year. I checked mine in February and it was missing several 1099s that I knew had been issued. When I checked again in April, they had appeared. So if you find things missing, it might just be timing rather than actual missing documents.

Has anyone used the "Other additions" section of M-2 Column c for this? When I try to enter it in my tax software it keeps wanting me to explain what the "other addition" is. Not sure what to write there.

Thanks everyone for the detailed responses! This has been incredibly helpful. Just to summarize what I'm understanding for my situation: 1. Capital contributions don't go on Schedule K line 10 or 16b (those are for income/deduction items) 2. They get reported on Schedule L (balance sheet) as increases to capital accounts 3. For Schedule M-2, they go in column c "Other additions" with description like "Shareholder capital contribution" 4. They increase my stock basis but don't affect AAA 5. Important to document with corporate minutes/resolutions to distinguish from loans I'm going to make sure I have proper documentation showing these were intended as permanent capital investments rather than loans. The advice about not withdrawing the funds shortly after contribution makes sense too - these were genuinely meant to help the business grow and purchase equipment. One follow-up question: should I be tracking my basis adjustments on a separate schedule or statement that I attach to my return, or is there a specific form for this?