I recommend checking your state tax agency websites too. Colorado's Department of Revenue website has specific information for remote workers. And btw, you're lucky Texas doesn't have state income tax, or you could be dealing with double taxation between two states!

This is definitely a red flag that needs immediate attention. As others have mentioned, using the company's address instead of your home address on your W-2 is incorrect and can create serious tax complications. Beyond just the address issue, you need to verify immediately whether they're withholding taxes for Texas or Colorado. Since Texas has no state income tax, if they're not withholding for Colorado, you could be facing a significant tax bill when you file. Colorado requires taxes on income earned while physically working in the state, regardless of where your employer is located. I'd recommend taking these steps right away: 1. Contact HR/payroll to request both a corrected W-2 (W-2C) with your proper address AND correction of state tax withholding going forward 2. Review all your paystubs to see which state taxes have been withheld 3. If no Colorado taxes were withheld, start calculating and setting aside money for what you'll owe 4. Consider making an estimated tax payment to Colorado to avoid underpayment penalties The sooner you address this, the better. Don't let them brush this off as "just administrative" - it has real tax consequences for you.

I went through almost the exact same situation last year with my PayPal 1099-K showing around $85K in transactions from sports betting activities. The key thing that helped me was creating a detailed spreadsheet that separated: 1) Actual deposits TO sportsbooks (not taxable income) 2) Withdrawals FROM sportsbooks (potential winnings) 3) Money transfers with friends (definitely not taxable) 4) Net gambling wins/losses by session The 1099-K is just PayPal reporting gross payment volume - it's NOT all taxable income. You'll only pay tax on your net gambling winnings (if any). Since you mentioned having net losses, you might not owe additional tax from gambling at all. For the friend situation, keep clear records showing when money was just passing through your account versus actual gambling activity. Text messages, Venmo descriptions, etc. can all serve as documentation. I'd recommend going with a CPA who has gambling tax experience rather than H&R Block. The cost difference was worth it for the peace of mind and proper documentation.

I'm dealing with a very similar situation right now! Got my PayPal 1099-K showing about $67K in transactions, mostly from DraftKings and some peer-to-peer transfers for betting pools with friends. One thing I learned from my preliminary research is that you absolutely need to keep the friend transactions separate from your actual gambling activity. The IRS doesn't care about money that just flows through your account - they only want to tax actual gambling winnings. I'd definitely lean toward finding a CPA with gambling tax experience. I called around to a few tax preparers and was shocked at how many weren't familiar with the new 1099-K reporting requirements or how to properly handle online gambling situations. Also, start gathering your documentation now if you haven't already. Most sportsbooks let you download your complete betting history, which makes creating that detailed record much easier. Don't wait until tax season when you're stressed and rushing to get everything together. The good news is that if you truly had net losses for the year, you shouldn't owe tax on gambling income - but you still need to report everything correctly to avoid any red flags with the IRS.

This thread has been incredibly informative! As someone who occasionally buys lottery tickets when traveling for work, I never realized how complex the tax implications could be. One question I haven't seen addressed yet - what happens with online lottery purchases? Some states now allow you to buy tickets through official state lottery apps or websites. If I'm physically located in State A but use State B's official lottery app to purchase a ticket (assuming they allow out-of-state purchases), which state's tax rules would apply? Also, does anyone know if there are different rules for group lottery pools? My office has a weekly pool where we buy tickets in whatever state our company headquarters is located, but our employees live in multiple different states. If we won big, would each person be taxed based on their individual state of residence, or would it be based on where the tickets were purchased as a group? These cross-state situations seem way more complicated than I initially thought. Really appreciate all the expert insights being shared here!

This has been such an eye-opening discussion! I had no idea the tax implications could be this complex. I'm a CPA but don't usually handle lottery cases, so this thread has been really educational. One aspect I wanted to add that I haven't seen mentioned yet is the impact on estimated quarterly tax payments. If you win a significant amount mid-year, you'll likely need to make estimated payments to avoid underpayment penalties, especially if you're dealing with multiple states. For example, if you win $100K in July and you're dealing with both your home state and the state where you bought the ticket, you can't just wait until next April to pay all those taxes. The IRS and most states require quarterly estimated payments when you have income that wasn't subject to withholding. Also, don't forget about local taxes! Some cities and counties also tax lottery winnings. New York City, for instance, has its own income tax on top of New York State tax. So you could potentially be dealing with federal, state, AND local tax obligations on the same winnings. The key takeaway from all these great comments is: keep detailed records, understand the rules in both states involved, and don't hesitate to get professional help for larger amounts. The complexity definitely justifies the cost of expert advice!

One more thing worth noting: there's legislation proposed in Congress (Digital Asset Tax Fairness Act) that would specifically address crypto taxation including potentially exempting Bitcoin ETFs from wash sale rules to match the treatment of direct Bitcoin holdings. No guarantee it passes, but this area is definitely evolving. For the TBIL question, I can confirm from my own state tax filing that the interest portion from treasury ETFs remains state-tax exempt. My accountant verified this and showed me where it's documented in my ETF's annual tax document packet. You have to look at the breakdown they provide of qualified vs non-qualified income sources.

This is a really comprehensive discussion! I wanted to add one practical consideration that might help others: if you're actively trading both direct Bitcoin and Bitcoin ETFs, consider keeping them in separate accounts or at least tracking them very carefully. I learned this the hard way when I had overlapping positions and got confused about which transactions were subject to wash sale rules and which weren't. Since direct Bitcoin trades can be tax-loss harvested immediately while ETF trades cannot, having a clear separation helps you optimize your tax strategy. Also, for anyone considering the Bitcoin ETF route, remember that while you lose some of the tax flexibility compared to direct ownership, you gain other benefits like being able to hold them in retirement accounts, no custody concerns, and easier estate planning. It really comes down to your specific situation and investment goals. One last tip: if you're using tax software to prepare your returns, make sure it's updated for the current year. Some of the older versions don't properly handle the nuances between crypto property treatment and ETF security treatment, which could lead to incorrect wash sale calculations.

I've been following this discussion and there's one more critical piece that hasn't been mentioned yet - make sure you understand how the K-1 distributions will work going forward with your inherited QSST shares. As a QSST beneficiary, you'll receive K-1s from the S-Corp showing your share of income, but the trust might not distribute enough cash to cover the taxes on that income (called "phantom income"). This is especially important with an 18% stake in a $3.7M company - the pass-through income could be substantial. You'll want to work with the other shareholders and management to establish a distribution policy that provides enough cash to cover tax obligations. Many S-Corps have agreements requiring minimum distributions to cover taxes, but if your grandfather's estate didn't negotiate this, you could be stuck paying taxes on income you never received in cash. Also, since you mentioned this is a family business, consider whether there are buy-sell agreements or other restrictions on your shares. Sometimes these agreements can affect both the valuation for step-up purposes and your future ability to sell. The stepped-up basis is only valuable if you can actually realize it through a sale or other disposition. Given the complexity and the dollar amounts involved, I'd strongly recommend getting a tax attorney who specializes in S-Corps and estate planning involved, not just a regular CPA. This situation has too many moving pieces to handle without specialized expertise.

This thread has been incredibly helpful - there's so much nuance to QSST and S-Corp basis issues that I never would have considered! One additional consideration for @161c4afb254b - since you mentioned your regular tax person seems confused about QSSTs, you might want to start looking for a replacement now rather than waiting until tax season. The ongoing compliance requirements for QSSTs are pretty specific (annual income distributions, proper K-1 reporting, maintaining the trust's qualifying status), and having someone who doesn't understand the rules could create problems down the road. Also, I'd recommend documenting everything related to the inheritance and basis calculations in a dedicated file. Keep copies of the death certificate, the estate's business valuation, all QSST election documents, and any correspondence with the IRS or estate attorney. If you ever get audited, having a complete paper trail will make your life much easier. The IRS has been paying more attention to step-up basis claims lately, especially for business interests, so being able to substantiate your stepped-up basis with proper documentation is crucial. Given that your inheritance is worth over $600K, it's definitely large enough to attract scrutiny if not properly documented. Best of luck navigating this - it's complicated but manageable with the right professional help and documentation!