Has anyone had experience with the deferred salary situation specifically? I had something similar happen where I took stock instead of salary, and when the company went under, the IRS initially questioned my write-off. I had to fight to prove it wasn't just a capital loss.

One thing to keep in mind with your angel investment is that you might also want to look into whether it qualifies as Qualified Small Business Stock (QSBS) under Section 1202. Even though the investment became worthless, if it was QSBS when you acquired it, you could potentially get better tax treatment on any gains from other QSBS investments by increasing your exclusion amount. Also, regarding your $22,000 in unrealized stock losses - if you're planning to hold onto those stocks long-term, consider whether tax-loss harvesting makes sense. You could sell the losing positions before year-end to realize the losses, then use them to offset any capital gains plus up to $3,000 against ordinary income. Just be careful about the wash-sale rule if you want to buy back similar positions within 30 days. The timing advice from Amara is spot-on. Since you're already planning to work with a CPA, make sure to gather all your documentation now - startup dissolution papers, final investor communications, employment agreements showing the salary deferral arrangement, etc. Having everything organized will make your CPA consultation much more productive and potentially save you money on their fees.

I'm dealing with a very similar situation - my divorce finalizes in September and I've been wrestling with these same tax questions. One thing that's been helpful is creating a detailed timeline of everything tax-related before the divorce is final. For your specific situation, since you mentioned you're splitting expenses 50/50 and both maintaining the household, make sure you're documenting all of that. Even though you can't file jointly after the divorce, having clear records of who paid what could be crucial for determining things like who gets certain deductions. Also, regarding your daughter and the custody arrangement - don't assume your ex automatically gets all the tax benefits just because they have primary custody. The dependency exemption, child tax credit, and Head of Household status can sometimes be negotiated separately from the physical custody arrangement. I've seen divorce agreements where the non-custodial parent gets to claim the child in alternating years or gets other tax benefits as part of the overall settlement. The house situation is definitely worth exploring further. If you can coordinate selling before the divorce finalizes, you'd preserve that $500K married filing jointly capital gains exclusion instead of dropping to $250K each. Given that your house is 50/50 owned, this could save both of you significant money if there's substantial appreciation. My advice would be to get both a tax professional and make sure your divorce attorney understands the tax implications of the timing. These decisions made now will impact your taxes for years to come.

The tax implications of mid-year divorce can be really overwhelming, but you're smart to think through these issues now rather than being surprised later. A few additional points that might help: Since your divorce is finalizing in August/September, you'll definitely be filing as Single for 2024 (not married filing jointly). However, don't overlook the potential for Head of Household status if you end up with your daughter for more than half the year - even with the 60/40 split, track those nights carefully because holidays, summer breaks, and other variations could push you over the threshold. For the house situation, I'd strongly recommend getting a CPA involved to run the numbers on selling before vs. after divorce. The difference between the $500K married exclusion and $250K single exclusion could be substantial depending on your home's appreciation. Some couples even delay finalizing the divorce by a few weeks to coordinate a beneficial sale. One thing I learned during my own divorce: consider proposing a tax provision in your settlement where you alternate years claiming your daughter, or where the non-custodial parent gets the dependency exemption in exchange for the custodial parent keeping Head of Household status. These creative arrangements can benefit both parties. Also, start keeping meticulous records NOW of all shared expenses, overnight stays with your daughter, and household costs. The IRS doesn't require this documentation with your return, but if there's ever a dispute or audit, you'll be grateful to have everything organized.

Oof, this is happening to so many people this year! I went through the same thing in 2023 - they took about $4,500 from my refund for loans I'd been ignoring for way too long. The worst part is feeling blindsided by it, especially when you're counting on that money. One thing I learned is that even if they already took your refund, you can still contact your loan servicer to get on a rehabilitation program or income-driven repayment plan to prevent future offsets. It won't get this year's money back, but it'll protect next year's refund. Also, definitely check if your address is updated with both the IRS and Department of Education - that's usually why people don't get the advance notices. Hang in there, it gets easier once you know what you're dealing with! 💙

This is such a common issue right now and I totally feel your pain! They offset about $2,100 from my refund this year for federal student loans that went into default during the pandemic. What's really frustrating is that even though loan payments were paused, the collection actions weren't. I never got proper notice either - just saw it on my transcript after the fact. The silver lining is that there ARE options even after they take your money. I called the Default Resolution Group at 1-800-621-3115 and they helped me set up a loan rehabilitation program. Now I pay $150/month for 9 months and after that, the default status gets removed and future refunds are protected. Also, if you're married and filing jointly but the loans are only in your name, definitely look into filing an injured spouse claim for next year - it can protect your spouse's portion of the refund. Don't lose hope, there are ways to work through this! 💪

One additional consideration that might be helpful - make sure to review your S-corp election timing and any potential Section 1202 Qualified Small Business Stock (QSBS) benefits. If your LLC made the S-corp election early enough and you've held your interest for at least 5 years, you might qualify for the QSBS exclusion which could eliminate federal taxes on up to $10 million of the gain (or 10x your basis, whichever is greater). This would be even better than just avoiding the 3.8% NIIT - it could potentially eliminate the entire federal capital gains tax on your $875K gain. The QSBS rules are complex and have specific requirements around when the election was made, the type of business, and how the stock was acquired, but it's definitely worth having your accountant review this when they return. Also, since you mentioned multiple owners, each owner can potentially claim their own $10M QSBS exclusion, so the total benefit for your group could be substantial. This is one of those situations where the entity structure (LLC electing S-corp treatment) might actually work in your favor for tax planning purposes.

Looking at your situation, you're in a really strong position to avoid the 3.8% NIIT on your $875K gain. Since you've been actively involved in running the business since 2018, you almost certainly meet the material participation requirements that exempt you from NIIT. A few key points based on the great discussion above: **Material Participation** - With 6+ years of active involvement, you likely qualify under multiple tests (500+ hours annually, substantially all participation, or the 5-of-10 years test). The LLC/S-corp structure doesn't change this fundamental exemption. **Documentation Priority** - Start gathering evidence of your participation NOW: emails showing business decisions, calendar entries, meeting minutes, travel records, contracts you signed, etc. Even without perfect hour logs, multiple types of evidence showing consistent involvement will be convincing. **QSBS Potential** - This could be huge! If your LLC made the S-corp election early and you've held your interest since 2018, you might qualify for Section 1202 QSBS exclusion. This could eliminate federal taxes on your entire $875K gain (not just the 3.8% NIIT). Given the potential $131K+ in tax savings, consider having your accountant prioritize this analysis even if they're on vacation. **Next Steps** - Gather all formation documents, S-corp election paperwork, and ownership records. Document your business activities timeline. If QSBS doesn't apply, the material participation exemption alone should save you about $33K in NIIT. With the sale in 6 weeks, time is critical but you have multiple strong paths to significant tax savings. This is definitely worth expediting professional review!

I'm in a very similar situation - became a US tax resident in 2024 and just discovered I have PFICs in my European portfolio. Reading through all these responses has been incredibly helpful! One thing I want to add based on my research: if you do decide to sell now, make sure you understand the "dual status" tax year implications. Since you became a resident alien on January 1, 2024, your entire 2024 tax year is treated as a resident year for PFIC purposes, but there might be some complexities around when exactly the gains are taxable. Also, regarding the reinvested dividends in your synthetic ETF - this is actually more complicated than mentioned above. Synthetic ETFs use derivatives to track the index rather than owning the underlying stocks directly. The tax treatment can be quite different from physical ETFs, and the "distribution" question depends on the specific swap structure used by Amundi. I'd strongly recommend getting professional help before making the MTM election. It's not just about the current year - once you make that election, you're locked into marking the investment to market every year until you sell it. If the investment starts declining in value, you could end up with some weird tax situations. Has anyone here dealt specifically with Amundi ETFs and their synthetic replication structure for US tax purposes?

I've been following this thread closely as someone who went through a similar PFIC situation last year. A few additional points that might help: First, regarding the timing question several people asked - yes, you'll still need Form 8621 for 2024 even if you sell in October, but as others mentioned, it's a one-time filing for the disposition rather than ongoing annual reporting. Second, about synthetic ETFs and Amundi specifically - I dealt with this exact issue. Amundi's synthetic ETFs typically use unfunded swaps, which means the fund doesn't actually own the underlying securities but has a derivative contract. For PFIC purposes, this doesn't change the fundamental classification - it's still likely a PFIC - but it does complicate the distribution analysis. The IRS generally looks through to the economic substance, so synthetic replication doesn't provide an escape from PFIC treatment. One thing I wish someone had told me earlier: if you're planning to continue investing while living in the US, consider this a learning experience. European ETFs, even the good ones like Amundi CW8, become tax-inefficient for US residents due to PFIC rules. After I sorted out my existing holdings, I moved all new investments to US-domiciled equivalents like VTI or VTIAX, which track similar indices without the PFIC complications. Given your relatively small unrealized gain (900 euros), selling now and reinvesting in US equivalents might be your cleanest path forward. The tax hit is manageable and you avoid years of complex reporting.