Great question about the timing! The timing of your renovations relative to your initial depreciation schedule doesn't really matter - you can start depreciating capital improvements as soon as they're placed in service, regardless of when you established your original building depreciation. For the different types of improvements, they actually do have different recovery periods: - Flooring (carpet, hardwood, tile) - typically 5-7 years depending on the type - Kitchen appliances - usually 5 years - Bathroom fixtures (toilet, sink, tub) - 7 years - Built-in improvements like cabinets or countertops - 27.5 years (same as the building) The key is whether the improvement is considered "personal property" (shorter recovery periods) vs. a structural component of the building (27.5 years). Your accountant can help classify each improvement properly, but this differentiation can significantly impact your annual deductions since shorter recovery periods mean higher annual depreciation. One tip: keep detailed records and receipts for each renovation project separately - it makes the depreciation calculations much cleaner and helps if you're ever audited.

This is incredibly helpful advice, especially about getting a professional appraisal! I hadn't considered that the remaining lease term could affect the allocation. In my case, the 99-year lease started about 5 years ago, so there are still 94 years left - sounds like that supports a higher building allocation. The point about depreciation recapture is something I definitely need to factor into my long-term planning. I'm treating this as a long-term rental investment, but it's good to know about the 25% recapture rate when I eventually sell. Do you have any specific recommendations for finding appraisers who are experienced with leasehold properties? I imagine not all appraisers are familiar with these situations. Also, would the appraisal need to specifically state the land/building allocation percentages, or is it sufficient if it just explains the leasehold structure and lets me calculate the allocation myself? Thanks for bringing the professional CPA perspective to this discussion - it really adds credibility to all the advice that's been shared here!

Form 8833 is for reporting treaty-based return positions, but the step-up in basis for new residents isn't actually a treaty provision - it's part of regular US tax law (specifically IRC Section 1.1-1(b)). So you shouldn't need Form 8833 for just the step-up basis claim. However, if you're claiming benefits under a specific treaty provision between the US and your former country, then Form 8833 would be needed for those specific claims.

This is really helpful advice about documentation! I'm curious about the state tax implications you mentioned. I'm currently in California and wondering if they have any special rules for new residents with foreign assets. Do you know if California recognizes the federal step-up basis, or do they have their own calculation method? I want to make sure I'm prepared for both federal and state filing requirements.

preach! 👏 been waiting 8 weeks now smh

exactly! my cousin filed MFJ and got hers back in 6 days while i'm still waiting after 2 weeks filing single. there's definitely other factors at play here besides filing status

That's a really important point I didn't even think about! Do you know if switching to professional gambler status for this coming tax year would help my grad school applications for next fall? Or would they still look at previous years too?

For most graduate program financial aid, they'll look at your prior-prior year tax returns. So for the 2025-2026 academic year, they'll be looking at your 2023 tax returns. For the 2026-2027 academic year, they'll look at your 2024 returns. If you're applying for programs starting Fall 2025, they'll likely use your 2023 returns which are already filed. But if you're looking at programs for Fall 2026, then your 2024 tax filing (which you'll do in early 2025) will be what matters. In that case, switching to professional gambler status for 2024 could potentially help your financial aid situation significantly. Some schools also have supplemental financial aid forms where you can explain special circumstances. If your 2023 return shows inflated income due to gambling winnings versus actual profit, you might be able to explain this situation and provide documentation of your actual net income.

This is really helpful advice! I'm curious about the business bank account setup - did you open it as a sole proprietorship or do you need to have some kind of formal business entity established first? Also, when you say you logged 30+ hours per week, are you including time spent actually watching the games you bet on, or just the research and analysis portions? I'm trying to get a realistic sense of what the IRS considers "substantial" time investment. I definitely spend a lot of time on research and following teams, but I want to make sure I'm tracking the right activities to support my case.

For the business bank account, I opened it as a sole proprietorship using my SSN - you don't need a formal business entity like an LLC. Most banks will let you open a business account as a sole proprietor, just bring documentation showing your business activity (I used my betting statements and a simple business plan I wrote up). Regarding the time tracking, I include everything that's directly related to making informed betting decisions: researching team stats, injury reports, weather conditions, line shopping across different sportsbooks, and yes, watching games when it's for analysis purposes (like tracking how teams perform in certain situations). I don't count just casually watching games for entertainment. I also track time spent on bankroll management, reviewing my betting history for patterns, and even time spent learning new betting strategies or reading books about sports betting. The key is showing that you're approaching this systematically and putting in the effort you would for any other business. 30+ hours might sound like a lot, but when you break it down - say 2-3 hours of research per day plus watching key games and managing your portfolio - it adds up quickly. The IRS doesn't have a specific hour requirement, but they want to see that it's a substantial commitment, not just casual activity.

This is great info - thanks! They definitely don't fall into most of these categories, but the hardship option might be worth exploring. Their financial situation isn't great since the business failure. Would you happen to know what form or process is used to request "currently not collectible" status?

To request Currently Not Collectible (CNC) status, you'll need to call the IRS and speak with a revenue officer or collection agent. There isn't a specific form - it's handled over the phone or in person. You'll need to provide detailed financial information including Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) or Form 433-F (Collection Information Statement) depending on their situation. The IRS will want to see bank statements, pay stubs, expense documentation, and proof that paying the tax debt would prevent them from meeting basic living expenses. They use national and local expense standards to determine if someone qualifies. If approved, the account is marked as CNC and collection activities stop, which should reverse the passport certification. Keep in mind that CNC status doesn't make the debt go away - it just pauses collection while the CSED clock keeps running. So this could be perfect for your family member's situation since they're already close to the 2027 CSED date.

This is exactly the kind of practical advice I was hoping to find! Thank you for sharing your real-world experience. It makes perfect sense that the IRS systems wouldn't automatically sync with the State Department right away - bureaucracy rarely works that smoothly. I'm definitely going to save this thread and make sure my family member is prepared to be proactive in 2027. Having all the payment records and assessment documentation ready will be crucial. Did you find that calling the IRS or visiting a local office worked better for getting that written confirmation letter? Also, do you remember roughly how long it took from when you requested the letter to actually receiving it? The 6-week delay you experienced is actually really important to know about - if someone was planning international travel right around their CSED date, that could cause major problems if they assumed everything would be automatic.