One thing to watch out for - make sure you're only counting actual scholarships and not loans! I almost made this mistake. My son had what the school called a "tuition award package" that included both scholarships and subsidized loans. Only the scholarship portion qualifies for the penalty exception. Also, keep really good records. I had to go through an IRS verification process last year, and they wanted documentation showing the scholarship amounts for each year, plus proof of the 529 withdrawal purpose. Better to have too much documentation than not enough!

This is such great information! I'm actually in a very similar boat - my son graduated in 2021 and we still have about $15,000 sitting in his 529 from various merit scholarships he received. I had no idea we could withdraw penalty-free based on scholarship amounts until I stumbled across this thread. One question though - if I withdraw now in 2023, do I report this on my 2023 tax return even though the scholarships were from 2018-2021? And do I need to break down which scholarship amounts came from which years, or can I just total them all up as long as I don't exceed the total scholarship amount received? Really wish I had known about this sooner, but better late than never! Thanks everyone for sharing your experiences.

Just want to add another option to consider: Delaware Statutory Trusts (DSTs) through a 1031 exchange. First, you'd need to convert your stock proceeds into investment real estate (even a small property would work), then you could 1031 exchange into DST interests. DSTs are passive investments in institutional-quality real estate. You get: - Tax deferral through the 1031 exchange - Professional management (solving your time constraint issue) - Regular income from the properties - Potential appreciation The catch is that first step - you need to buy real estate before you can 1031 into a DST. Given your timeline with the acquisition, this might be challenging, but worth exploring.

For someone in your situation with $1.8M in forced capital gains, I'd strongly recommend working with a tax professional who specializes in large capital gains events - this isn't the time for DIY tax planning given the amounts involved. A few additional considerations beyond what's already been mentioned: **Installment Sales**: Even though it's an acquisition, check if the buyer might structure part of the payment as deferred consideration or earnouts. This could spread the gain over multiple years. **Net Investment Income Tax**: Don't forget about the 3.8% NIIT on top of capital gains rates for high earners. This affects your total tax calculation. **State Tax Planning**: Depending on your state, you might benefit from establishing residency in a no-capital-gains-tax state before the sale if feasible and legitimate. **Bunching Deductions**: Since you'll have a high-income year, consider bunching charitable deductions, state/local taxes (up to the $10K limit), and other itemized deductions into this tax year. The QOZ route seems most promising for your situation, but due diligence on fund quality is absolutely critical. Look for funds with experienced real estate developers, clear business plans, and regular investor reporting. Avoid anything that feels like a pure tax play without underlying investment merit. Given the 180-day deadline for QOZ investments after your stock sale, start your research now so you're ready to move quickly once the acquisition closes.

You're asking the right questions, but I think you're missing some nuanced benefits. Yes, single-member LLCs have weaker liability protection than multi-member ones, but they're not completely useless. The key is understanding what they DO protect against. An LLC can shield you from business debts and contractual obligations. If your business defaults on a loan or can't pay suppliers, creditors generally can't go after your personal house, car, or savings. Where it gets murky is with personal liability - if YOU personally cause harm (malpractice, negligence, etc.), the LLC won't protect you. The tax "disregarded entity" status is actually a feature, not a bug, for many small businesses. It simplifies your taxes while keeping the door open for future elections. Once you hit around $60K+ in profit, you can elect S-Corp status and potentially save thousands in self-employment taxes. The real scam isn't LLCs themselves - it's the cottage industry of services that charge $500+ to file $50 worth of paperwork. Most states let you file directly online for under $200. The ongoing costs (annual reports, etc.) are usually minimal too. Bottom line: LLCs aren't magic bullets, but they're useful tools when set up properly and used as part of a broader business strategy.

As someone who's been through this exact decision process, I think the real issue is that LLCs are often presented as either "essential" or "worthless" when the truth is much more nuanced. You're absolutely right that the liability protection for single-member LLCs is weaker than many people realize. Courts are more willing to pierce the corporate veil when there's only one owner, especially if you haven't maintained strict formalities. But "weaker" doesn't mean "nonexistent." The key insight I wish someone had told me earlier is that LLCs protect you from different types of risks in different ways. They're much better at protecting against business debts and contractual liabilities than they are at protecting against personal torts or professional malpractice claims. Here's what changed my perspective: I realized I was thinking about it backwards. Instead of asking "Is an LLC worth it?" I started asking "What are my specific risks, and how does each business structure address them?" For my consulting business, the main risks were client payment disputes and potential contract breaches - areas where an LLC actually does provide meaningful protection. The tax situation is actually more flexible than it initially appears. Yes, you start as a disregarded entity, but that keeps your options open. As your business grows, you can elect different tax treatments without having to restructure entirely. My recommendation: Don't form an LLC just because everyone says you should, but don't dismiss it just because the protection isn't perfect. Analyze your specific situation, risks, and long-term plans first.

Don't forget about the medical mileage rate if she ever uses a personal vehicle for appointments! It was 22 cents per mile for 2023.

Just wanted to add some practical advice from someone who's been through this exact situation with my elderly father. Your documentation approach is solid, but I'd suggest one additional step that really helped us during an IRS inquiry. Create a simple one-page summary that shows the total medical transportation expenses ($262.50 for bus trips + the two Lyft rides) alongside her other major medical expenses for the year. This gives context and shows the transportation costs are reasonable relative to her overall medical care. Also, since your mom doesn't drive, you might want to note that in your documentation - it establishes that public transit was her necessary and reasonable method of transportation, not just a choice. The IRS looks favorably on taxpayers who use the most economical transportation method available. One last tip: if any of those 35 appointments were for specialists that required referrals, keep those referral documents too. They help establish the medical necessity of each trip. Good luck with your filing!

Important point nobody mentioned - even if you determine your mom can't claim you as a dependent, you need to coordinate with her before filing. If she incorrectly claims you and you also claim yourself, both returns will get flagged and processed manually, delaying any refund by months. Make sure to talk to her BEFORE either of you file. You don't want to be in a situation where the IRS has to sort it out.

I was in a very similar situation last year and want to share what I learned. The key thing that helped me was creating a detailed spreadsheet of ALL my expenses for 2024 - not just the obvious ones like tuition and rent. Here's what I included in my support calculation: - Tuition and fees (what mom paid vs what I paid) - Housing costs (rent, utilities, renter's insurance) - Food expenses (groceries, dining out, meal plans) - Transportation (car payments, insurance, gas, public transit) - Medical expenses (insurance premiums, copays, prescriptions) - Personal expenses (clothing, phone bill, entertainment) - Educational supplies (books, laptop, etc.) When I added everything up for the full year, even though my parents paid my tuition and supported me through May, I had actually provided more than half my own support because my post-graduation expenses were substantial and I was making good money. The bright side of not being claimed as a dependent was significant - I got the full standard deduction, qualified for education credits on expenses I paid myself, and my overall refund was actually larger than the dependent exemption would have saved my parents. Sometimes it works out better for the family overall if the new graduate files independently! Definitely run the numbers both ways before deciding, and make sure you and your mom are on the same page before either of you files.