I'm dealing with a similar depreciation mess on my rental property and this thread has been incredibly helpful! I made the same mistake of using FMV instead of adjusted basis when I converted my home to a rental about 3 years ago. One thing I'm still unclear on - when calculating the 481(a) adjustment, do I need to account for any improvements I made to the property between the original purchase and the conversion date? I added a deck and updated the kitchen during the time I lived there, so my adjusted basis should be higher than just the original purchase price, right? Also, for those who chose the 4-year spread option, do you report it as ordinary income each year, or does it get special treatment since it's related to depreciation recapture? I'm trying to plan out the tax impact before I file the Form 3115. Thanks to everyone for sharing their experiences - it's so much better than trying to figure this out from just reading IRS publications!

I went through this exact same situation two years ago and can confirm you're on the right track with Form 3115 and DCN 7. The relief of finally getting it sorted out is huge! One thing I'd add that hasn't been mentioned yet - make sure you keep really detailed records of your correction process. I created a spreadsheet showing year by year what I claimed vs. what I should have claimed, along with supporting documentation for my original purchase price and any improvements. This came in handy when I got a notice from the IRS about 8 months later (not an audit, just a clarification request). Having everything organized made it easy to respond, and they accepted my documentation without any issues. Also, if you're using tax software, some programs don't handle Form 3115 very well, especially the 481(a) adjustment calculations. I ended up having to do mine by hand and attach it as a PDF. Just something to keep in mind if your software seems to be calculating things incorrectly. The peace of mind of knowing everything is correct going forward is worth the hassle of fixing it properly!

I've been dealing with this same message for about 10 days now and honestly it's driving me crazy! 😅 The waiting is the worst part because you have no idea if it's going to be resolved in a few more days or if you're about to get hit with some random notice asking for more documentation. What I've learned from lurking in tax forums is that this message can mean anything from "we're just slow" to "something doesn't match up and we need to verify." The frustrating part is there's literally no way to know which one it is until either your refund shows up or you get mail from them. Has anyone here actually called the IRS phone line while having this status? I'm debating whether it's worth the 2+ hour hold time just to potentially be told "wait for a notice" 🤷‍♀️

I'm going through the exact same thing right now! Got that message 5 days ago and it's been radio silence since. What's really getting to me is how vague it is - like they could literally be reviewing ANYTHING about your return and you have zero visibility into what's actually happening behind the scenes. I've been checking the app obsessively (probably not helping my stress levels lol) but the status hasn't budged at all. The part about "if we need additional information, we'll mail a notice" is what keeps me up at night because who knows how long that could take to arrive or what they might want. From what I've read online, some people get through this in a week, others are stuck for over a month. It seems totally random which is so frustrating when you're trying to plan around getting your refund. Really hoping we both hear something soon! 🤞

Don't forget the deadline to establish a Solo 401k is December 31 of the tax year, even though you can actually fund it later (employee contributions by tax filing, employer contributions by business tax deadline)! I missed this subtlety last year and lost out on significant tax savings. Also, for the record, my CPA confirmed that with a partnership LLC, both spouses can have separate Solo 401ks as long as they're both partners in the business, but you need to be careful with the specific plan documents.

This is a complex situation that requires careful planning! I've been through something similar with my spouse and our consulting business. One key point that hasn't been fully addressed: when you have a partnership LLC, the income flows through to you as distributive shares reported on Schedule K-1, which is treated as self-employment income for retirement contribution purposes. This is different from W-2 wages or 1099 consulting income in how the contribution limits are calculated. For your husband's situation specifically - since he already maxes out his employee contribution at his day job, he can only make employer contributions through the LLC based on his share of the partnership's net earnings from self-employment. The 20% calculation applies to his net earnings after the self-employment tax deduction. Also worth noting: make sure your partnership agreement clearly defines each partner's role and compensation if you're both setting up Solo 401ks. The IRS will want to see that the contributions are reasonable based on actual services provided to the business. I'd strongly recommend getting a fee-only financial advisor who specializes in small business retirement planning to review your specific numbers before making final decisions. The interaction between partnership income, outside consulting, and existing employer plans can get tricky fast.

Great question! I went through this exact situation last year and learned a lot about how survey income works with taxes. Here's what I discovered: The key thing to understand is that survey rewards ARE taxable income regardless of whether you receive any tax forms. The $400-500 you earned definitely needs to be reported on your tax return. For the 1099-K specifically - PayPal will only send you one if your total payments received through their platform exceed $600 for the tax year (this is the current threshold). If you're under that amount, you won't get a 1099-K, but you still need to report the income. Since you're doing surveys occasionally rather than as a regular business, this income should typically be reported as "Other Income" on Schedule 1 of your Form 1040, not as self-employment income. This is important because it means you won't owe self-employment tax on it, which saves you about 15.3%. Make sure to keep records of all your survey payments - PayPal should have a transaction history you can download. Even without receiving tax forms from the survey companies, you're responsible for reporting the income accurately. The IRS considers survey participation as being paid for your time and opinions, which makes it taxable income even though you're not technically an employee of these companies.

Adding to what others have said about the 1099-K threshold and reporting requirements - one important thing to keep in mind is that the IRS has been pretty clear that ALL income is taxable, regardless of whether you receive tax forms or not. For your $400-500 in survey income, you're definitely required to report it even without a 1099-K. The good news is that since this sounds like occasional survey participation rather than a regular business activity, you should be able to report it as "Other Income" on Schedule 1, which means you'll avoid the 15.3% self-employment tax. I'd recommend downloading your complete PayPal transaction history for the tax year to get an exact total of all payments you received. This will serve as your documentation since you likely won't receive any tax forms from the survey companies themselves. One tip that helped me: when reporting this on Schedule 1, I wrote something like "Survey rewards - various companies via PayPal" in the description field. This makes it clear what the income was if the IRS ever has questions, and shows you're being transparent about the source. The key is just making sure you report the full amount accurately, even though the process might seem confusing without receiving official tax forms.

Anyone know if there's a way to check how many times I've claimed AOTC in the past? I honestly can't remember if I've used it for 3 or 4 years during my undergrad.

I went through this exact same situation last year! The key thing to understand about Form 8863 Line 19 is that it's essentially a checkbox certification where you confirm you haven't exceeded the 4-year lifetime limit for AOTC. Since you mentioned you're 24 and in post-bacc studies, the critical question is how many years you've already claimed AOTC during undergrad. If it's 3 or fewer years, you can still claim AOTC for this year, which would typically give you a better credit than Lifetime Learning. Here's what helped me figure it out: I pulled my tax transcripts from the IRS website (irs.gov - search "Get Transcript") to see exactly how many years I'd claimed AOTC. Turns out I'd only used it twice, so I was eligible for AOTC even as a post-bacc student. For Line 19 specifically, if you've claimed AOTC for 3 or fewer prior years, you'd check "No" to the question about claiming it for more than 4 years. This confirms you're still within the lifetime limit and can claim it this year. The income limits and qualified expenses requirements still apply, but TurboTax should help you navigate those once you get past the Line 19 confusion!