I've been following this discussion with great interest since I'm in a similar situation with a mixed-use property I'm preparing to sell. One thing I haven't seen mentioned yet is the importance of keeping detailed records of your actual living expenses versus business expenses during the time you occupied the property. The IRS may look at patterns like whether you deducted utilities, insurance, and maintenance costs as business expenses for the entire property, or if you properly allocated them between personal and business use. If you claimed 100% business deductions on utilities while living there, it could undermine your argument that 40% was truly residential. Also, for anyone dealing with this situation: make sure you understand the "non-qualifying use" rules. If you ever rented out the residential portion or used it for business purposes after May 6, 2008, those periods of non-qualifying use could reduce your available exclusion even if you otherwise meet the ownership and use tests. The tax implications can be substantial, so definitely worth getting professional guidance, but it's encouraging to see that others have successfully navigated similar situations with proper documentation and planning.

This is a really comprehensive discussion! As someone who works in tax preparation, I want to add one practical tip that might help with documentation: create a detailed timeline of your property use right now while the details are still fresh in your memory. Document month-by-month what percentage of the property you lived in versus used for business, any changes in the setup, when you completed major renovations, and any periods where the use might have been different (like if you temporarily used part of your living space for business during busy periods, or vice versa). Also keep records of how you filed your taxes each year - did you claim home office deductions from the residential portion? Did you properly allocate expenses? This timeline will be invaluable whether you're working with a tax professional, using a service like the ones mentioned above, or if you ever get questioned by the IRS. One more thing - don't forget that you might be able to add the cost of the residential renovations to your basis, which could reduce your overall capital gain. Keep all those receipts for kitchen, bathroom, flooring, and other improvements that were specifically for making the space livable as a residence.

As someone who works in tax compliance, I want to emphasize a few critical points that haven't been fully addressed: First, you mentioned that 20% of your stock was "automatically sold at vesting to cover taxes" - this is crucial information for your CPA. Make sure they understand the exact timing of when shares vested versus when they were sold, as this affects whether you have additional compensation income or capital gains/losses to report. Second, regarding that $20k payment you made that never got withdrawn - you should be able to see this as a credit on your account once you file your 2021 return. The IRS likely applied it to your account but couldn't process the installment agreement without a filed return to reference. Third, don't let anyone pressure you into quick decisions about Offers in Compromise. With your current income trajectory ($280k base plus stock/bonuses), the IRS will calculate that you can pay the full amount over time. The OIC process is lengthy, expensive to apply for ($205 application fee plus 20% of offer amount upfront), and has a very low acceptance rate for high earners. Your best path forward is exactly what others have suggested: file the returns through your CPA, request first-time penalty abatement if you qualify, and set up a manageable installment agreement. The IRS generally allows up to 72 months for balances over $50k, which would put your monthly payments around $1,200-1,400 depending on interest and remaining penalties. The key is getting compliant first, then addressing the payment structure. Don't let tax resolution companies capitalize on your stress - this is a solvable problem that doesn't require their expensive services.

I went through something very similar a few years back and want to share what I learned the hard way. You're absolutely right to be skeptical of those "Fresh Start" companies - they're essentially charging you thousands to do paperwork you can handle yourself. Here's my practical advice based on my experience: **Immediate Priority:** Get those returns filed ASAP. The failure-to-file penalty (5% per month) is crushing you way more than the failure-to-pay penalty (0.5% per month). Even if you can't pay immediately, filing stops the bigger penalty clock. **That $20k Payment:** Once your 2021 return is processed, that payment should appear as a credit on your account. The IRS couldn't set up your installment agreement because there was no filed return to reference. You didn't lose that money. **Installment Agreement:** With your new income, you can definitely get approved for a payment plan. For amounts over $50k, you'll need to submit Form 433-F showing your financial situation, but it's straightforward. The IRS typically allows up to 72 months, which would put your payments around $1,000-1,200/month depending on penalties and interest. **Penalty Abatement:** If you had clean compliance for the three years before 2021, definitely request first-time penalty abatement. I saved about $6k just by making that request - it's a phone call, not rocket science. The most important thing is don't let panic drive you into expensive services. Your situation is complicated by the dollar amount, but not by the process. A good CPA for the filings plus handling the installment agreement yourself will save you thousands.

I went through the exact same thing last month! My refund amount disappeared after showing for weeks and I was panicking. Turns out the IRS was just doing some background adjustments. Got my transcript from the IRS website (irs.gov - go to "Get Your Tax Record" then "Get Transcript Online") and it showed they were verifying some info. The amount came back a few days later and I got my deposit within the week. Don't stress too much - if WMR still shows "processing" you're still in the system and they're working on it! 🤞

This exact thing happened to me in December! Had my refund amount showing for about 6 weeks, then one day it just vanished but still said "processing." I was freaking out because I really needed that money for bills. Turns out the IRS was just doing some routine verification - they were cross-checking my W-2 info with what my employer reported. The amount popped back up about 5 days later and I got my direct deposit 3 days after that. As long as you're still seeing "processing" and not "action required" or anything like that, you should be good! I know the waiting is awful but try not to panic. The IRS systems are just really slow and clunky sometimes.

This is such a complex situation! Given the amount involved ($67k), I'd strongly recommend your cousin take a multi-pronged approach: 1. **Document everything**: Keep all paperwork from the unclaimed property claim and the check itself 2. **Contact multiple sources**: Try both the state unclaimed property office AND the acquiring healthcare group (they may have inherited records from the original employer) 3. **Set aside taxes immediately**: Even if she's not sure of the exact treatment, putting aside 25-30% for potential taxes is smart 4. **Consider professional help**: With this much money at stake, a tax professional consultation could save her significantly more than it costs One thing that hasn't been mentioned - if this was from a healthcare employer, it could potentially be related to malpractice insurance refunds, continuing education reimbursements, or even profit-sharing distributions that were never claimed. Each of these would have different tax implications. The key is getting clarity on what type of payment this was originally. Once she knows that, the tax treatment becomes much clearer. Don't let the complexity paralyze her - start with setting aside money for taxes and gathering information, then work with a professional if needed.

Wow, what an incredible windfall for your cousin! I actually went through something similar when I discovered I had unclaimed property from a previous employer, though not nearly that amount. One thing I'd add to all the great advice here - your cousin should also check if the state where the unclaimed property was held has any specific tax guidance. Some states provide detailed documentation about the tax implications when they send out the checks, and this information can be really helpful when filing returns. Also, since this came from a healthcare employer and she's a nurse practitioner, there's a chance this could be related to credentialing fees, CME reimbursements, or even retention bonuses that were approved but never processed before she left. Healthcare organizations often have complex payroll systems, and during acquisitions, smaller items like these can easily get lost in the transition. I'd definitely echo the advice about setting aside money for taxes immediately. Even if she ends up owing less than expected, it's much better to have the money available than to be caught off guard next April. And given the substantial amount, the peace of mind from consulting with a tax professional would probably be worth the cost. Hope she's able to get clarity on the source soon - what an amazing discovery!

Am I the only one who thinks it's crazy we have to report $12 losses? The IRS probably spends more than $12 just processing that information. The whole tax system needs an overhaul.

I totally get the frustration about reporting such a small amount! I went through the same thing with a $8 loss on my first stock sale. But here's the thing - your broker already sent that 1099-B to the IRS, so they know about the transaction. If you don't report it, there's a mismatch between what they have on file and what's on your return. The silver lining is that even small losses can be useful. That $12 loss will carry forward if you don't have gains to offset it this year, and you can use it against future gains or take the $3,000 annual deduction against regular income. Plus, going through the process now with a small amount is great practice for when you hopefully have bigger gains to report later! Most tax software walks you right through it once you enter the info from your 1099-B. It's really not as complicated as it seems at first.