I think the IRS intentionally makes these forms confusing lol. Has anyone had their Form 8802 rejected? How long did it take to get a response? I'm supposed to start a position in Korea in 6 weeks and I'm worried about timing.

I went through this exact same nightmare with Form 8802 about 6 months ago! For line 4a when you check "Individual," you literally just need to write your full name exactly as it appears on your most recent tax return - nothing more, nothing less. Don't add your SSN, don't add extra info, just your name. Since you're working for a Singapore company, make sure you're also including copies of your most recently filed 1040 and any relevant schedules (like Schedule C if you have any self-employment income). The IRS uses this to verify your U.S. tax residency status for the foreign tax authority. One tip that saved me - call the IRS practitioner priority line if you get stuck. The regular customer service line is useless, but the practitioner line (even though you're not technically a practitioner) sometimes gets you through to someone who actually knows about international forms. Good luck with your deadline!

In my experience selling a similar property, Form 4797 is your friend. You'll need to use this form to report the sale of business property, which includes the rental portion. For the primary residence part, you'll use Schedule D and Form 8949. The trick is making sure the allocation method is reasonable and consistent. My CPA recommended documenting EVERYTHING about how we determined the split. Also, don't forget to account for any improvements made specifically to one unit or the other! If your mom renovated just her apartment, that would adjust the basis differently than improvements to the rental unit.

You're dealing with a classic mixed-use property situation, and yes, you're absolutely right that you need to treat this as essentially two separate properties for tax purposes. Here's what you need to know: **Allocation Method**: Use a reasonable method to split the property - square footage is most common, but you could also use fair market value of each unit or number of rooms. Whatever method you choose, document it thoroughly and be consistent. **Primary Residence Portion**: Your mom can claim the Section 121 exclusion (up to $250,000) on the gain allocated to her primary residence portion, assuming she meets the ownership and use tests (lived there 2 of the last 5 years). **Rental Portion**: This is where it gets tricky. You'll need to: - Calculate the adjusted basis (original cost basis minus accumulated depreciation) - Report any gain on Form 4797 (Sale of Business Property) - Pay depreciation recapture tax at 25% on the depreciation previously claimed - Any remaining gain above the recapture amount gets taxed at capital gains rates **Key Point**: Even if your mom never actually claimed depreciation on her tax returns, the IRS assumes she should have, so you'll still need to recapture the "allowable" depreciation. I'd strongly recommend getting a tax professional involved given the complexity, especially since there are specific rules about mixed-use properties that can trip people up.

Has anyone used the "simplified" method for calculating depreciation that I've heard about? My accountant mentioned there might be an easier way to handle all this for small landlords with just 1-2 properties.

This is exactly the kind of confusion I had when I started with rental properties! The key thing to understand is that depreciation carryover only applies if you owned the property in previous years - since this is your first year, you don't have any carryover amounts to worry about. For your kitchen improvements, those $8,500 in costs will need to be depreciated over their useful life (typically 5-15 years depending on what you installed), not deducted all at once. The depreciation starts when the property was "placed in service" - meaning ready for rent, not when tenants actually moved in. One tip: make sure you're separating the land value from the building value when calculating your depreciation basis. Only the building and improvements can be depreciated, not the land itself. You can usually find this breakdown on your property tax assessment or have an appraiser determine it. Keep detailed records of all improvements with dates and costs - you'll need this information every year going forward, and it becomes crucial when you eventually sell the property for calculating depreciation recapture.

I've been dealing with consolidated 1099s for years and they're always confusing at first! The key thing to remember is that these forms are designed to be comprehensive, so they include ALL possible sections even if only a few apply to your situation. For your specific case with only box 6 (acquisition premium) having a value, you're actually in good shape. As others have mentioned, acquisition premium is an adjustment that reduces OID income - but since you don't have any OID income to reduce (no values in boxes 1-3), there's nothing for you to report on your tax return. The reason brokerages can't just show zeros in empty boxes is actually due to IRS formatting requirements. They're only supposed to include boxes that have actual values or are relevant to your specific investments. It's counterintuitive, but that's how the system works. My advice: keep that 1099-OID page with your tax records, enter the information exactly as shown if your tax software asks for it, but don't stress about reporting anything additional. The acquisition premium will just sit there as informational data unless you have actual OID income in future years.

I completely understand your frustration with consolidated 1099s! They really do make things unnecessarily confusing. From what you've described with only box 6 (acquisition premium) showing a value, you're actually dealing with a pretty common scenario that doesn't require any action on your tax return. Think of it this way: acquisition premium is like having a coupon that reduces the cost of something you're buying - but if you're not actually buying anything, the coupon doesn't matter. Since you don't have any OID income to report (which would show up in boxes 1-3), that acquisition premium amount is essentially just sitting there unused. I'd recommend just entering the information exactly as shown if your tax software prompts you for 1099-OID data, but don't expect it to change your tax liability. The software should recognize that there's no reportable income and handle it appropriately. And definitely keep that form with your tax records - it shows you received the proper documentation even though it doesn't impact this year's taxes. The good news is once you understand how these work, future years will be much less stressful when you see similar "incomplete" forms!

Thank you all for this incredibly helpful discussion! I've been lurking here for months but finally decided to create an account because I'm dealing with this exact situation right now. My divorce was finalized last month and I've been really stressed about what this means for my tax future. Reading through all these responses has been such a relief - especially hearing from people who have actually been through this process. I had no idea about needing to file that formal termination statement, so thank you @Lindsey Fry for bringing that up! I almost would have just filed as single and assumed the IRS would figure it out. One question I haven't seen addressed - does anyone know if there are any implications for state taxes? I'm in California and wondering if I need to do anything special at the state level when terminating this federal election, or if it's automatically handled when I file my state return as single. Also, has anyone dealt with this situation where there were joint estimated tax payments made during the year before the divorce was final? I'm not sure how to handle those on my separate return. Thanks again everyone - this community has been more helpful than hours of trying to decipher IRS publications!

I've been following this thread closely as I'm currently going through a similar situation with my non-resident spouse election. What strikes me most is how many people (myself included) had no idea about the formal termination statement requirement - this really should be more clearly explained in IRS materials! One thing I'd add that I learned from my tax attorney: if you're dealing with this situation, make sure to review any prior year returns where you made the election. Sometimes the original election statement wasn't properly formatted or included all required information, which could create issues down the road. It's better to identify and correct any deficiencies while you're already dealing with the termination process. Also, for anyone worried about the "once-in-a-lifetime" restriction like I was - remember that the vast majority of people will never need to make this specific election again anyway. The restriction only matters if you plan to marry another non-resident alien in the future, and even then, there are other ways to handle international tax situations. The most important thing is getting that termination properly documented now so you can move forward with confidence in your future tax planning!