Has anyone filed Form CT-3-S for NY? I have an S-Corp (not an LLC) in New York but live in Connecticut, and I'm totally confused about what I need to file where. The NY website is so complicated!

This is exactly the kind of multi-state tax complexity that trips up so many LLC owners! Based on your situation, here are the key points: Since you're a Colorado resident performing all work in Colorado, that's where you'll owe state income taxes on the LLC income - regardless of where the LLCs are registered. Colorado will tax you on your worldwide income as a resident. For Delaware: Good news! Delaware generally doesn't tax income from LLCs that don't have physical presence in the state. You'll just need to pay the annual franchise tax ($300) to maintain registration. For New York: This is trickier. If your NY LLC has any nexus to New York (clients there, meetings there, property there), you might need to file NY returns. Even if you don't owe NY tax because you're not a resident, you may still need to file informational returns. One thing to watch out for: Make sure you're not creating unintended nexus by having business bank accounts, registered offices with mail forwarding, or conducting any business activities in DE or NY. I'd recommend consulting with a multi-state tax professional to review your specific situation, especially given the complexity of nexus rules. Each state interprets "doing business" differently, and you want to avoid any compliance issues.

While I understand the frustration, cycle codes actually do have specific meanings within the IRS processing system. Cycle 05 indicates Thursday processing, which is different from cycle 01 (Monday) or cycle 03 (Wednesday). Compared to previous years, the current processing times are actually running more efficiently for most filers, though independent contractors often face additional verification steps. Your experience last year with the verification letter is unfortunately common, but the system itself is quite structured - just not always transparent to us on the outside.

I'm also cycle 05 and filed in early February - this wait is brutal! From what I've learned lurking in this community, cycle 05 processing happens on Thursdays, but the transcript updates can take 24-48 hours to reflect changes. I've been checking mine religiously too and finally saw movement last Thursday night around 11 PM EST. The lack of an 846 code doesn't necessarily mean there's a problem - it could just be normal processing delays or routine verification. For independent contractors like us, they sometimes do additional checks on Schedule C income, which can add a week or two. I'd give it until next Thursday's cycle before worrying too much. The IRS processing times this year seem more consistent than last year's chaos, so hopefully we'll both see those 846 codes soon! 🤞

Chiming in as someone who also had a dormant LLC - don't forget about tax software options. I used TaxSlayer last year and it guided me through what I needed for my zero-activity LLC completely. Most of the major tax software options (TurboTax, H&R Block, etc.) have sections specifically for handling business returns, even with no income or expenses.

I went through this exact same situation with my LLC last year! The short answer is yes, you'll likely need to file something even with zero activity. Since you mentioned it's been completely dormant, you'll probably need to file a Schedule C (Form 1040) showing all zeros - this is required for single-member LLCs even when there's no business activity. The key thing to remember is that the IRS wants to see that you're reporting your business status, even if that status is "no activity." It's basically confirming that you didn't have unreported income rather than just ignoring the business entirely. Also, don't overlook your state requirements! Many states have annual filing fees or franchise taxes that are due regardless of business activity. Since you're planning to actually start using the LLC now, you'll want to make sure you're in good standing at both the federal and state level before you begin operations. I'd recommend checking with your state's Secretary of State website for any annual report requirements and deadlines - these are often separate from tax filings and can have penalties if missed.

I went through this exact situation last year and can share my experience. PATH status means your return has cleared initial automated checks, but it's definitely not a guarantee of approval. During my PATH hold period, the IRS was still verifying my W-2 information against what my employer reported. I actually received a CP2000 notice about 6 weeks after my PATH status began because of a discrepancy they found during this verification process. The key thing to watch for is whether you see a 570 code appear on your transcript - that would indicate additional review is needed. PATH is really just the IRS saying "we can't release EITC/ACTC refunds before mid-February regardless of status" rather than "your return is approved." Keep monitoring those transcript codes closely!

I appreciate everyone sharing their experiences here! As someone who's been through this process multiple times, I want to emphasize what others have mentioned - PATH status is really just the beginning of a verification period, not an approval confirmation. In my experience, the IRS uses this mandatory hold time to cross-reference your claimed credits against third-party data sources (W-2s, 1099s, etc.). I've seen cases where everything looked fine initially, but discrepancies were discovered during this verification phase that led to additional delays or adjustments. The best approach is to keep checking your transcript weekly rather than daily (to avoid unnecessary stress) and look specifically for codes 570 (additional account action pending) or 971 (notice issued). If you see either of those, it means they found something requiring further review. On the positive side, if you see code 846 with a refund date, that's your green light that everything has been approved. Stay patient and try not to overthink the daily transcript changes - the system updates can be inconsistent during this period!

One approach I don't see mentioned yet is offsetting the recapture with other passive losses if you have them. If you have other rental properties that are showing paper losses this year, you might be able to use those to offset some of the recapture income. Also look into if a 1031 exchange makes sense for you. If you're planning to reinvest in another property anyway, you can defer the recapture tax by doing a like-kind exchange. You'd need to identify a replacement property within 45 days and close within 180 days, but it could save you a significant tax bill now.

This is a tough situation but unfortunately very common with bonus depreciation. I went through something similar with a commercial property where I took 100% bonus depreciation and then had to sell due to cash flow issues. One thing that might help reduce the sting - make sure you're capturing ALL your selling expenses when calculating the recapture. Things like realtor commissions, legal fees, title insurance, transfer taxes, etc. can all be deducted from your sale proceeds, which effectively reduces the amount subject to recapture. Also, if you haven't already, consider getting a second opinion from a tax professional who specializes in real estate. Some CPAs aren't fully up to speed on all the nuances of bonus depreciation recapture, especially with mixed-use properties or cost segregation studies. The $400k depreciation you mentioned seems quite high for a $1.3M property unless there were significant personal property components involved. The silver lining is that at least you got the tax benefit upfront when you probably needed it most. Still stings though - I totally get the frustration of paying taxes on "phantom income" from a property that barely generated any cash flow.