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!

I'm in the exact same boat as you! Got an IRS TREAS 310 deposit two days ago and I'm terrified to touch it. Like you, I haven't filed this year's taxes yet and didn't amend anything. The amount is pretty substantial too - over $2,000 - so I'm really paranoid it's some kind of system error. I've been reading through all these responses and it sounds like there are legitimate reasons this could happen, but I'm still nervous. I think I'm going to follow the advice about checking my tax transcript online first, and if that doesn't give me clarity, maybe try one of those services people mentioned to get answers faster than waiting weeks for an IRS letter. Thanks for posting this - at least I know I'm not the only one dealing with this anxiety! Let us know what you find out about yours.

I've been through this exact situation twice now and want to share what I learned. The first time I got an unexpected IRS TREAS 310 deposit, I panicked just like you and didn't touch the money for months. Turns out it was a legitimate adjustment to my Earned Income Tax Credit from the previous year. The second time it happened, I was much more prepared. Here's what I'd recommend doing in order: 1. Check your IRS online account or request a tax transcript immediately - this is free and will show you any recent account activity 2. Don't spend the money yet, but don't panic either - these adjustments are more common than you'd think 3. If the transcript doesn't give you enough detail, consider using one of the services others mentioned here to get faster answers The key thing to remember is that if it truly is an IRS error, they'll eventually figure it out and request the money back - but they're not going to penalize you for their mistake as long as you cooperate when they ask for it back. However, in most cases these deposits are legitimate adjustments based on information they received after you filed. Keep that money in a separate savings account until you get confirmation of what it's for. That way you're not accidentally spending it, but you're also earning a little interest on it while you wait for answers.

I was in a similar situation with my S corp and almost got nailed in an audit. Even though the instructions for 1125-E say to file it if gross receipts are over $500K, the bigger issue is definitely the lack of reasonable compensation. My accountant now has me document WHY I'm paying myself the amount I do each year with comparable salary data for my industry. This has been super helpful in justifying my compensation decisions.

Based on this discussion, I'm really concerned about my situation too. I've been running my S corp for 3 years with similar revenue levels but zero officer compensation. Reading about the Watson case and the potential for retroactive reclassification has me pretty worried. I think I need to take action immediately - both filing Form 1125-E correctly (showing $0 compensation) and establishing reasonable compensation going forward. The documentation approach that Andre mentioned sounds like exactly what I need to implement. Has anyone here actually gone through the process of fixing this retroactively? I'm wondering if I should reach out to a tax professional who specializes in S corp compliance or if there are specific steps I should take first. The potential penalties and back taxes are keeping me up at night!

Has anyone actually calculated how much money you're losing by letting the IRS hold your refund? I'll do some quick math... For a $20k refund applied to next year's taxes, at current high-yield savings rates of around 4.5%, you'd be missing out on about $900 in interest over the year. If you invested it and got a 7% return, that's $1,400 lost. That's not even considering the opportunity cost if you needed that money for something important like paying down high-interest debt or making a down payment on something. I made a similar mistake with a smaller amount last year and just let it ride because the hassle of amending didn't seem worth it, but for $20k? I'd definitely go through the trouble to get that money back in my hands.

I went through this exact same situation last year with a $12k refund that I accidentally applied to 2025 taxes. Here's what I learned from the experience: The IRS absolutely does NOT pay interest on refunds you voluntarily apply to future tax years. They only pay interest on delayed refunds that they're required to issue to you directly. I ended up filing Form 1040-X to get my money back, and it took exactly 14 weeks to process. The key things that helped speed it up: 1. I included a cover letter explaining it was an accidental election 2. I highlighted the specific line changes on the 1040-X 3. I sent it certified mail so I had proof of delivery One thing to consider though - if you're going to owe estimated taxes for 2024 anyway, you might want to calculate whether the hassle is worth it. For me, I knew I'd have a much smaller tax liability in 2024, so getting the money back to invest made sense. The amended return process is definitely a pain, but for $20k, I'd absolutely go through with it. That's a significant amount of money that could be working for you instead of sitting with the IRS earning nothing.