Has anyone dealt with the situation where some inherited stocks had declined significantly since purchase? My dad had some tech stocks that were worth way less when he died than what he paid. I'm wondering if there's any way to use the original higher basis instead of the stepped-down death value to avoid locking in those losses?

I'm going through a similar situation right now with my grandmother's estate, and I wanted to add a few practical tips that helped us navigate this process: 1) **Get multiple copies of the death certificate** - You'll need certified copies for each brokerage firm, and some require original certificates. We needed 6 copies total across different financial institutions. 2) **Ask about estate settlement services** - Most major brokerages have dedicated estate departments that can walk you through the entire process. They often assign a specific representative to your case, which makes communication much easier than calling the general customer service line. 3) **Keep detailed records of everything** - Create a spreadsheet tracking each account, the date you submitted paperwork, when the step-up was processed, and the new basis amounts. This becomes crucial if you need to reference anything later. 4) **Consider the tax implications for your mom's future** - While you can't be selective about the step-up, think about her overall tax situation. If she's planning to sell any stocks soon after inheriting them, having the stepped-up basis will minimize capital gains taxes. The whole process took us about 6-8 weeks to complete across three different brokerages, but having everything organized upfront made it much smoother. My condolences on your father's passing - this administrative work is tough to handle while grieving.

Quick question - does anyone know if leasing vs. buying affects these tax deductions for heavy vehicles? I'm looking at a Tesla Model X which is over 6,000 lbs, but considering leasing instead of buying.

This is a really helpful thread! I'm in a similar situation - considering a heavy EV for my consulting business. One thing I haven't seen mentioned yet is the federal EV tax credit. For new electric vehicles, you can potentially get up to $7,500 in tax credits on top of the Section 179 deduction, though there are income limits and other restrictions. Also worth noting that some states have additional EV incentives that can stack with the federal benefits. In my state, there's an additional $2,500 rebate for business purchases of electric vehicles over 6,000 lbs. The key thing I've learned from my research is that you really need to track everything meticulously - business use percentage, charging costs if you claim those, and all the documentation requirements. It can be quite lucrative if you qualify, but the IRS is definitely paying attention to these heavy vehicle deductions more closely now.

Just to add a practical example: Last year my salary was $72,000. I contributed $15,000 to my traditional 401k. My W-2 showed about $57,000 in Box 1, but my "earned income" for tax credit purposes was still considered to be $72,000. So I was able to claim the full child care credit based on my $72k earned income while still enjoying the tax benefits of having a lower AGI ($57k plus other adjustments). It's really the best of both worlds for tax planning!

I went through this exact situation two years ago when I was trying to balance maximizing my 401k contributions with maintaining eligibility for various tax credits. Here's what I learned: The key distinction is between "earned income" and "adjusted gross income" (AGI). Traditional 401k contributions reduce your AGI but NOT your earned income for tax credit purposes like the Child and Dependent Care Credit. Your earned income is essentially your gross compensation before any pre-tax deductions. So if you make $60,000 and contribute $10,000 to a traditional 401k, your earned income is still $60,000 for tax credit calculations, even though your AGI drops to $50,000. This means you can absolutely maximize your 401k contributions to get that employer match without worrying about losing your child care credit eligibility. The IRS specifically defines earned income as compensation received for personal services, regardless of where that money goes afterward. I'd recommend reviewing Form 2441 instructions if you want to see the official language, but the consensus here is correct - 401k contributions don't affect earned income for tax credits.

If you need more personalized advice, I'd recommend calling the IRS to discuss your specific situation. I tried for days to get through their normal line and kept getting disconnected. Finally used Claimyr (https://claimyr.com) and got connected to an agent in about 15 minutes who walked me through all my filing status questions. They confirmed MFJ was best for our family with multiple kids and helped me understand exactly how the credits would apply in our situation.

Great advice from everyone here! Just wanted to add that you should also look into the Additional Child Tax Credit if your tax liability is low. With 5 kids, even if your combined income reduces your regular tax to near zero, the ACTC can still give you up to $1,500 per child as a refund. This is especially helpful if a significant portion of your income is from sources with lower withholding. Also, make sure you understand the age requirements - kids must be under 17 at the end of the tax year to qualify for the full $2,000 CTC. Any over 17 might still qualify for the $500 Other Dependent Credit instead.

One thing nobody's mentioned - what type of business entity are you? Is it an LLC, an S-Corp, a C-Corp? This makes a HUGE difference for how you can be classified! If you're a C-Corp, you're definitely an employee regardless of being a co-founder. If you're an LLC, you could be treated as a partner for tax purposes. S-Corps are somewhere in between. Also, does your employment agreement include anything about being "at will"? If so, that's another strong indicator you're an employee, not a partner.

This is a classic case of worker misclassification that I see way too often in startups. Your CEO doesn't get to unilaterally decide you're a "partner" just because it's more convenient for payroll taxes. The IRS has very specific criteria for determining worker classification, and having equity doesn't automatically make you a partner. Key factors include: - Do you have a written employment agreement? ✓ (You do) - Are you paid a regular salary vs. profit distributions? ✓ (You get $125k salary) - Does the company control how you do your work? ✓ (Likely as CTO) - Have you been receiving W-2s? ✓ (You mentioned you have one) All of these point strongly toward employee status. Your equity is just additional compensation, not a change in your fundamental relationship with the company. I'd strongly recommend pushing back on this change. If your CEO insists on reclassifying you, demand that he consult with both a tax attorney and accountant first. Improper worker classification can result in significant penalties for the business - back taxes, interest, and fines that could seriously hurt your startup. Don't let him shift the tax burden to you without proper legal justification. You signed an employment agreement for a reason!