I almost paid $1,200 for a CPA to do a 1041 for my dad's estate but decided to try it myself. Best decision ever. Took about 6 hours of research and careful work, but I managed it fine. The trick is understanding that a 1041 is fundamentally about tracking income earned during estate administration. The property sale might be the most complex part, but if you have the date-of-death value documented, it's just a matter of accurately reporting the numbers.

For a relatively straightforward estate like yours, the 1041 is definitely doable yourself with some patience and research. I handled my grandmother's estate last year - similar situation with dividends, interest, and a house sale. The key things that helped me: 1) Get the property appraised as of the date of death for your stepped-up basis calculation, 2) Keep meticulous records of all estate expenses (legal fees, appraisal costs, etc. are deductible), and 3) Don't rush - take time to understand each section. The biggest "gotcha" I encountered was properly timing distributions to beneficiaries. If you distribute assets before the end of the tax year, you need to account for that differently than if you wait until after year-end. Given that your uncle passed in November, you're only dealing with about 1.5 months of 2024 estate activity, which should make it more manageable. The IRS Publication 559 (Survivors, Executors, and Administrators) walks through most of the concepts you'll need. $1,350 for what sounds like a relatively simple estate does seem excessive, especially when you'd face the same cost again next year.

Does anyone know if keeping a spreadsheet of your contributions is acceptable as proof if you get audited? I've been tracking mine carefully but don't have all the original contribution receipts.

I went through this exact same situation a few years ago and learned some hard lessons. The key thing to understand is that your basis for Form 8606 Line 2 is NOT the same as the cost basis on your brokerage statement. Your brokerage's cost basis includes market fluctuations and investment gains/losses, while the IRS basis is purely the sum of your nondeductible contributions. Here's what I'd recommend: Start by checking if you have any old tax returns saved electronically. If you filed Form 8606 in previous years, Line 14 from your most recent filing should show your cumulative basis - that number rolls forward to become Line 2 on this year's form. If you can't find your old returns, the IRS transcript route mentioned earlier is your best bet. You can get them free online at irs.gov or by calling. The transcripts will show your previously reported nondeductible contributions. One more tip: Keep meticulous records going forward! I now keep a simple spreadsheet with contribution dates, amounts, and form references. It's saved me hours during tax season.

Just to clarify something that seems to be causing confusion in this thread - there's an important distinction between truly collectible/investment vehicles and regular cars that happen to be a bit special. For a regular car (even if it's a nice classic that you drive on weekends), you generally CANNOT deduct the loss. These are personal-use assets. For cars held EXCLUSIVELY as collectible investments, you potentially CAN deduct losses, but you need extensive documentation showing investment intent. For cars used in a BUSINESS (like a restoration business, car dealer, etc.), losses are generally deductible as business expenses. Most people fall into the first category and can't deduct losses, which is why the general advice is that car losses aren't deductible. Most folks simply can't meet the strict requirements for the exceptions.

This is such a frustrating aspect of the tax code that catches so many people off guard! I went through something similar with a vintage truck I had to sell at a loss during COVID when I needed cash fast. What really helped me understand the situation was learning about the "personal use presumption" - basically, the IRS assumes that unless you can prove otherwise with solid documentation, any vehicle you own is for personal use and enjoyment. Even if you barely drive it, even if it's rare or collectible, the default assumption is personal use. The harsh reality is that the tax code is designed this way intentionally. Personal assets like cars, boats, jewelry, etc. are expected to depreciate as part of their normal use cycle. The IRS views this depreciation as the "cost" of enjoying these items, similar to how you can't deduct the loss when your furniture gets old or your clothes wear out. What I learned from my tax advisor is that if you're serious about treating vehicles as investments going forward, you need to set up that framework BEFORE you buy, not after. This means business entities, proper documentation, storage agreements, maintenance logs, and most importantly - never using them personally. It's a pretty high bar to meet, but it is possible if you're committed to treating it as a true investment rather than a hobby that might make money.

The tax code has specific exceptions for certain types of gifts. For example, direct payments to educational institutions for tuition or to medical providers aren't subject to gift tax limitations at all. This is sometimes called the "educational and medical exclusion." So if your billionaire friend paid your kid's college tuition directly to the school, that's not subject to the annual gift tax exclusion limits. Same if they paid your hospital bill directly to the hospital.

This thread highlights a crucial distinction that many people miss: the difference between tax consequences for the giver versus the recipient. While everyone's focused on gift tax implications for the billionaire, the bigger issue is often unreported income for the recipient. If there's ANY business relationship, professional connection, or expectation of favorable treatment, these payments become taxable income to the recipient - not gifts. This is true even if the giver calls them "gifts" or doesn't issue proper tax forms. The IRS has specific guidelines about this in Publication 525. They look at factors like: the relationship between parties, whether there's a business context, timing relative to business decisions, and whether the recipient provided or was expected to provide services. For public officials or people in influential positions, these payments are almost never considered true gifts under tax law, regardless of how they're characterized. The recipient should be reporting them as "other income" on their tax return and paying taxes accordingly. The criminal liability here isn't just about bribery laws - it's also about tax evasion if these payments aren't being properly reported as income.

Form 926 is literally the worst! I had to file one last year when I transferred some crypto to a foreign exchange and the form is insanely complicated. Took me forever to figure out.

Great question! Based on the information you've provided, you should be in the clear regarding Form 926. With only a 0.00003% ownership stake in the PTP, you're well below the 5% threshold that would trigger Form 926 filing requirements for partnership-mediated transfers to foreign corporations. The key thing to understand is that Form 926 requirements for transfers through partnerships have specific ownership thresholds precisely to avoid burdening small investors like yourself with complex reporting requirements. The partnership itself handles the heavy lifting on foreign reporting at the entity level. However, I'd echo what others have mentioned - do keep an eye on your K-1 supplemental information for any PFIC reporting requirements (Form 8621). These can apply regardless of ownership percentage and are easy to miss if you're not specifically looking for them. PTPs sometimes invest in foreign funds that qualify as PFICs, and the reporting requirements are completely separate from Form 926. Your instinct to double-check is smart though - foreign reporting penalties can be steep, so it's always better to be cautious when you're unsure!