I'm completely new to this community but just went through this exact situation! My direct deposit was rejected by US Bank last week due to their daily limit (my refund was $9,200 and their limit was $5,000). Code 841 appeared on my transcript 3 days ago and I was really panicking until I found this thread. Reading everyone's experiences here has been so incredibly helpful and reassuring! The consistency in timelines (10-15 days seems to be the standard) gives me confidence that the automatic paper check process really does work reliably. @Brooklyn Foley - I know you posted this over a week ago, so I'm hoping your check has already arrived by now! Your situation is exactly what I'm going through, and this discussion you started has helped so many of us understand the process. Based on all the detailed experiences shared here, here's what I'm expecting: • Paper check will arrive within the next 1-2 weeks • It'll come from "U.S. TREASURY" with "BUREAU OF THE FISCAL SERVICE" return address • White envelope marked as important tax documents • My WMR status probably won't update to reflect the paper check This community is amazing - getting real experiences from people who've actually been through this process is so much more valuable than the confusing generic information on the IRS website. Thanks to everyone who took the time to share their timelines and details! It really helps reduce the stress and anxiety while waiting.

I'm new to this community and just went through this exact same situation! My direct deposit was rejected by my bank (KeyBank) about 10 days ago due to their daily deposit limit, and I saw code 841 appear on my transcript shortly after. I was really stressed about it at first, but reading through everyone's experiences here has been incredibly reassuring! My paper check just arrived yesterday - exactly 10 business days after code 841 appeared on my transcript. The process was completely automatic, just like everyone has described. The check came from "U.S. TREASURY" in a white envelope with "BUREAU OF THE FISCAL SERVICE" as the return address, clearly marked as important tax documents. @Brooklyn Foley - I hope your check arrived by now since you posted this over a week ago! Based on all the consistent timelines people have shared here (10-15 days seems to be the standard), you should have received it already. The waiting is definitely nerve-wracking when you need your money, but the system really does work automatically. What really helped me during the wait was reading all these real experiences from people who've actually been through this process. The IRS website doesn't explain it clearly, but this community has provided so much valuable insight. Thanks to everyone who shared their timelines - it makes such a stressful situation much more manageable when you know what to expect! The key takeaways I learned: it's completely automatic, no action needed on your part, and the Treasury Department handles it efficiently within that 10-15 day window. Hope this helps others going through the same situation!

Does anyone know if you can still do a backdoor Roth for 2024? I thought I heard something about the government closing this "loophole" but I'm not sure if that actually happened or was just proposed.

This is exactly what happened to me last year! The 1099-R showing the full amount as taxable is completely normal and expected for backdoor Roth conversions. Don't panic - you're not doing anything wrong. The key thing to remember is that the 1099-R is just the brokerage firm's way of reporting the distribution to the IRS. They have no way of knowing whether your original contribution was deductible or non-deductible, so they default to showing the entire amount as potentially taxable. When you file Form 8606, you're essentially telling the IRS "Hey, I already paid taxes on this money when I earned it, so the conversion shouldn't be taxed again." The form calculates your basis (the after-tax money you put in) and shows that the taxable portion of the conversion is $0. Make sure you keep good records of your Form 8606 - I learned the hard way that the IRS doesn't always automatically match everything up in their system. But as long as you file it correctly with your return, you'll be fine!

Could another option be contributing the property in exchange for a larger LLC interest? So instead of maintaining the 75/25 split, the mother receives additional LLC interest proportional to the property value, increasing her percentage ownership. Later on she could gift LLC interests gradually to her child using the annual gift tax exclusion ($16k/year for non-resident aliens).

As a non-resident alien myself who went through a similar property transfer, I'd strongly recommend getting a professional appraisal of the Florida property before proceeding with any option. The IRS will scrutinize the valuation heavily, especially for non-resident alien transactions. One approach that worked for my family was structuring it as a contribution to capital where your mother receives additional LLC interests proportional to the property value, then gradually gifts LLC interests back to you over several years using the annual exclusion. This spreads out any potential tax impact and gives you more control over timing. Also keep in mind that Florida has no state gift tax, but you'll still need to comply with federal requirements. Make sure to file Form 3520-A if the LLC is treated as a foreign trust for tax purposes, which can happen with certain ownership structures involving non-resident aliens. Document everything meticulously - the IRS pays extra attention to related-party transactions involving real estate and non-resident aliens. Consider having the LLC formally adopt a resolution authorizing the capital contribution and get independent valuations to support the transaction.

I think the most conservative approach is to report it as income, but you might want to consult with a tax professional who specifically has experience with surrogacy cases. There are some CPAs who specialize in this area. When my sister was a surrogate, she found one through her surrogacy support group who had handled dozens of similar cases and knew exactly how to approach it. Whatever you do, don't follow the agency's informal suggestion to not report it. The IRS has ways of finding unreported income, especially amounts this significant, and the penalties for non-reporting can be steep.

I went through this exact situation two years ago when my wife was a surrogate. After consulting with a tax attorney who specializes in reproductive law, we learned that the IRS generally treats surrogacy compensation as taxable income, but the classification (self-employment vs. other income) can make a huge difference in your tax liability. The key factors that helped us determine the proper reporting were: 1) Whether this was a one-time arrangement or part of an ongoing business, 2) How the contract was structured, and 3) The level of control the intended parents had over the process. In our case, we reported it as "other income" on Schedule 1 rather than self-employment income, which saved us thousands in self-employment taxes. We documented everything meticulously - separating actual compensation from medical expense reimbursements, which aren't taxable if properly documented. Don't let the agency's informal advice guide your tax decisions. The $42,000 you mentioned is significant enough that the IRS would likely notice if it's not reported, especially if it was paid via check or bank transfer. Better to be conservative and report it properly than face potential penalties later. I'd strongly recommend consulting with a CPA who has experience with surrogacy cases - it's worth the consultation fee for peace of mind on something this substantial.

Has anyone talked to their CPA about qualified charitable distributions from IRAs? My mother is over 70 and uses this to reduce her taxable income while satisfying her required minimum distributions. Not sure if it would work for capital gains specifically tho.

One strategy that hasn't been mentioned yet is donating appreciated property directly to charity instead of cash. If you have other appreciated assets (stocks, bonds, real estate), you can donate those directly and avoid paying capital gains tax on them while still getting the full fair market value deduction. For example, if you have $200,000 worth of stock that you originally bought for $50,000, donating the stock directly saves you capital gains tax on the $150,000 appreciation AND gives you a $200,000 charitable deduction. Then you could use the cash you would have donated to reinvest in similar securities. This doesn't help with your current property sale, but it's a more tax-efficient way to make large charitable donations if you have other appreciated assets in your portfolio. You essentially get to "stack" the tax benefits - avoiding capital gains AND getting the income tax deduction. Just make sure the charity can accept the type of asset you want to donate, and that you've held it for more than one year to qualify for long-term capital gains treatment.