This is such a helpful thread! I'm going through something similar with my company relocation package. One thing I'd add is to also check if your company offers any tax consulting services as part of their relocation benefits. Mine included a consultation with a tax professional specifically for relocation-related tax questions, which was super helpful. Also, if you're moving across state lines, make sure you understand the timing of when you become a resident of your new state for tax purposes. I moved in March but was still considered a part-year resident of my old state, which affected how the relocation income was taxed at the state level. The gross-up calculation should account for this, but it's worth double-checking with your HR or relocation company to make sure they got the state residency dates right. The documentation everyone's mentioning is crucial - I created a dedicated folder for all my relocation paperwork because there were so many different pieces (moving receipts, temporary housing, tax gross-up calculations, etc.).

Thank you all for this incredibly detailed discussion! As someone who just went through a similar relocation situation last year, I wish I had found this thread earlier. One additional tip I'd add - if your company uses a third-party relocation management company (like Cartus or SIRVA), they usually have dedicated tax specialists you can speak with directly. These folks deal with imputed income questions all day long and can walk you through your specific situation step by step. Also, don't panic when you see that big number on your paycheck! I know it's shocking at first (mine was around $38k), but the system is designed to handle this properly. The key is making sure your company did a "true-up" calculation at year-end to account for your actual tax situation vs. the estimated gross-up they did initially. Keep every single piece of paper, email, and receipt related to your move. I'm talking everything - even the pizza you bought for the movers if your company reimbursed it. Better to have too much documentation than not enough if questions come up later.

Quick question - I'm in a similar situation but my LLC is taxed as an S-Corp. Does that change what I need to file if there was no activity?

This is a great question that a lot of new LLC owners face! Just to add another perspective - if you're thinking about keeping the LLC for future use, you might want to consider the ongoing costs vs. the hassle of forming a new one later. In some states, the annual fees are pretty minimal (like $50-100), so it might be worth keeping it active if you think you'll use it in the next few years. But in states like California with that $800 annual fee, it's probably better to dissolve it and just form a new one when you actually need it. Also, make sure you're not missing any deadlines! Some states have specific timeframes for when you need to file annual reports or dissolve the LLC to avoid penalties. I learned this the hard way when I forgot about a deadline and got hit with late fees even though my LLC never made a penny. The IRS filing requirements are definitely confusing for inactive LLCs, but better to be safe and file the appropriate forms with zeros than risk penalties later.

5 Has anyone used an online tax program like TurboTax for reporting inheritance stuff like this? I'm wondering if they handle this situation correctly or if I need to see a professional.

Just want to add another perspective here - I went through something very similar when my grandmother passed and left her property to multiple heirs. The stepped-up basis rule that others mentioned is absolutely correct, but make sure you keep excellent records of everything. One thing I wish someone had told me: if there were any improvements or expenses related to settling the estate (like repairs needed before the sale, legal fees for the estate, etc.), those might affect your basis calculation. Also, if there was any time gap between your father's passing and when the property was actually distributed to you heirs, you might need to consider whether there was any appreciation or depreciation in that period. The 1099-S you received is just the IRS making sure they know money changed hands - it doesn't necessarily mean you owe taxes on it. But definitely report it properly on Schedule D and Form 8949 as others have mentioned. When in doubt, it's worth consulting with a tax professional who deals with estate issues regularly.

I work in mortgage lending and we accept the IRS Wage and Income Transcript in place of W-2s ALL THE TIME. It's actually preferred because it comes directly from the IRS and we know it hasn't been altered. Just make sure when you download it that you get the official PDF version and not just the web view.

Also want to mention that if you're having trouble with the IRS online identity verification process (which can be tricky), you can request transcripts by mail using Form 4506-T. It takes longer (usually 5-10 business days) but it's a reliable backup option if the online system isn't working for you. Just make sure to check the box for "Wage and Income Transcript" on the form, not just "Tax Return Transcript" - they're different documents and your mortgage lender specifically needs the wage information. You can download Form 4506-T directly from the IRS website and mail it to the address listed in the instructions. Given that your mortgage broker is getting impatient, I'd try the online transcript option first since it's immediate, but it's good to know you have this backup if needed!

I'm surprised nobody has mentioned Form 8308 yet. When there's a sale or exchange of a partnership interest, the partnership has a filing requirement to report the transaction to the IRS using Form 8308 (Report of a Sale or Exchange of Certain Partnership Interests). This is required if there are Section 751 assets involved. Make sure the partnership's tax preparer is aware of this transaction so they can handle this reporting requirement correctly. I've seen partnerships miss this form, which can create problems later.

This is a really comprehensive discussion! I'm dealing with a similar situation right now and wanted to add one more consideration that might be relevant. If your client has been receiving guaranteed payments from the LLC (like for management services), make sure to clarify whether any portion of the sale proceeds might be attributable to those future guaranteed payments. Sometimes in these partner buyouts, part of the purchase price is actually compensation for giving up future guaranteed payments rather than just the equity interest itself. Any portion that's really compensation for guaranteed payments would be ordinary income, not capital gain. It's another layer to analyze beyond just the Section 751 hot assets. The partnership agreement and sale documentation should help clarify this, but it's worth discussing with your client to make sure the economic substance matches how the transaction is structured on paper. Also, if the selling partner has any outstanding loans to/from the partnership, those need to be factored into the overall transaction analysis too.