Also make sure you're looking at the right section of the Account Transcript - the 846 code will be in the transactions section with a date next to it. If you see code 150 (tax return filed) but no 846 yet, it just means they're still processing. The refund date on the 846 code is usually the actual deposit date, so that's the golden number you're hunting for!

Another thing to keep in mind - if you have any holds or issues with your return (like missing forms or identity verification needed), you won't see the 846 code until those are resolved. The IRS will show other codes like 570 (additional account action pending) or 971 (notice issued) first. Don't panic if you see those, just means they need something from you before releasing the refund!

Quick note on code D (401k contributions) - even though they don't go directly on the 1040, they DO affect your eligibility for the Retirement Savings Contribution Credit (Form 8880). Make sure your Excel sheet accounts for this if your income is under the threshold!

This is such a helpful thread! I've been using a basic Excel template but realized I'm missing some key categorizations after reading through everyone's responses. One thing I'd add - if you have code S (salary reduction contributions to a Section 125 cafeteria plan), this is another one that's informational only and doesn't need to be reported anywhere on your return, similar to code DD. Also, for anyone dealing with code C (group-term life insurance over $50,000), this IS taxable and should already be included in your W-2 box 1 wages, but it's good to track separately in your spreadsheet since it might affect other calculations. @Liam Sullivan - I'd love to see that template too if you're sharing it! The conditional formatting idea sounds brilliant for catching codes that need special attention.

This is such a helpful discussion! As someone who works in elder care administration, I can add that the terminology used in facility assessments often doesn't align perfectly with IRS definitions, which creates confusion for families like yours. From what you've described, your parents likely would qualify as "chronically ill" for tax purposes. The key is that they cannot safely or completely perform these ADLs without assistance - regardless of whether the facility calls it "partial," "moderate," or "substantial." If they would remain partially undressed or unable to bathe safely without help, that meets the IRS standard. One thing to consider is requesting a more detailed assessment from the facility that specifically addresses the IRS criteria. Many facilities are familiar with this request and can provide supplementary documentation that uses more tax-friendly language. Combined with the Form 2652 from their doctor that others mentioned, you should have a solid foundation for claiming the full deduction. The arthritis documentation will be particularly important since it establishes the medical necessity for the assistance they receive.

Most facilities provide tax documentation letters at no charge since it's a routine year-end service, but some may charge a small administrative fee (usually $25-50) for more detailed supplementary assessments. It's definitely worth asking your facility's billing or administration office - they deal with these requests regularly and understand the tax implications for families. When you make the request, be specific that you need documentation that addresses IRS criteria for "chronically ill" status and substantial assistance with Activities of Daily Living. This helps them frame their assessment appropriately rather than using their standard care terminology. Also, don't overlook the value of having both the facility documentation AND the Form 2652 from their doctor. The facility provides the day-to-day care assessment, while the physician certification establishes the underlying medical necessity. Together, they create a comprehensive picture that strongly supports your position if the IRS ever questions the deduction. Given the potential tax savings involved - which could be substantial based on what others have shared - even a small documentation fee would be well worth the investment for the peace of mind and proper substantiation.

This thread has been absolutely invaluable! As a newcomer to rental property investing who's been drowning in IRS publications and conflicting online advice, seeing everyone's real-world experiences laid out so clearly is a game-changer. The three-bucket system explanation (@Miguel Alvarez) finally made everything click for me - active, portfolio, and passive income as completely separate categories where losses can only offset income from the same bucket. I've been banging my head against the wall trying to figure out why my dividend income couldn't help with my rental losses, and now it makes perfect sense (even if it's frustrating!). What I'm taking away as my action plan: - Set up the monthly tracking spreadsheet to categorize all income sources - Start documenting my real estate hours in case I want to pursue Real Estate Professional status later - Think of my suspended losses as a "tax loss bank" rather than getting frustrated about them - Consider the passive income implications when evaluating future rental property purchases I'm particularly interested in the syndicated real estate investment option that several people mentioned as a way to generate passive income to offset losses. For someone just starting out, are there minimum investment amounts that typically make these accessible, or are they mainly for more established investors? Thanks to everyone for sharing your experiences so openly - this practical wisdom is exactly what new landlords need to navigate these complex tax rules!

This has been such an incredibly helpful thread for understanding passive income rules! As someone who's been struggling with this exact issue on my rental properties, I can't thank everyone enough for sharing their real-world experiences. The three-bucket explanation really changed my perspective - I was getting so frustrated trying to use my stock dividends to offset rental losses, not understanding why the IRS treats "passive" dividend income differently from "passive" rental losses. Now I see they're in completely different tax buckets (portfolio vs. passive). What's really encouraging is hearing from people like @Max Knight about treating suspended losses as a "tax loss bank" rather than just getting frustrated about Form 8582. I've been looking at it all wrong - these aren't permanent losses, they're just deferred tax benefits waiting for the right opportunity. I'm definitely going to implement the tracking system suggestions and start documenting my real estate hours more carefully. Even though I probably don't hit the 750-hour threshold for Real Estate Professional status yet, it's good to have that documentation building up. For anyone else in a similar situation, this thread has shown me that the key is understanding the system and planning within it, rather than fighting against rules that aren't going to change. The practical wisdom here from experienced landlords is worth its weight in gold!

Has anyone used both TurboTax and H&R Block software to check how they handle this specific situation? I tried calculating this in TurboTax and it seemed to reduce my SEP contribution limit by my K1 losses, which sounds wrong based on what everyone is saying here.

Just wanted to add some real-world validation to this thread. I'm a CPA and see this exact situation frequently with clients who have multiple business entities. The advice given here is correct - your K1 partnership loss does NOT reduce your Schedule C income for SEP IRA contribution purposes. The key distinction is that SEP IRAs are employer-sponsored retirement plans, even when you're self-employed. Your sole proprietorship acts as both employer and employee, allowing you to make contributions based on that specific business's net earnings. The partnership is a separate legal entity that would need its own retirement plan structure. I always tell clients to think of each business entity as having its own "retirement bucket." Your Schedule C business has one bucket, your partnership has another (which typically can't contribute to your individual SEP anyway), and any W-2 employment would have yet another bucket. So yes, use the full $12,400 from your sole proprietorship as your SEP contribution basis. Just remember the actual contribution limit is slightly less than 20% due to the self-employment tax adjustment - closer to 18.587% of your net Schedule C profit.