This thread has been incredibly helpful! I was pulling my hair out over the same issue with my Schwab 1099-B. I kept seeing gain/loss calculations right there on the form but getting warnings about missing cost basis info. After reading through everyone's explanations, I finally understand that it's all about what gets reported to the IRS versus what the brokerage shows me. The key insight about checking the "Cost Basis Reported to IRS" column on the 1099-B is gold - I wish they made that more obvious! For anyone else dealing with this, I found that most of my "non-covered" transactions were from stock purchases I made back in 2009-2010 (before the reporting requirements kicked in) and some transfers from an old Merrill account. Makes total sense now why those would need code B on Form 8949 even though Schwab calculated the gains correctly on my form. One thing I'd add is that if you're using tax software, double-check that it's not automatically importing these as "covered" transactions. I caught TaxAct trying to treat everything as if it was reported to the IRS, which would have been wrong for about half my trades.

I've been dealing with this exact same confusion for years and finally have a system that works! What really helped me was creating a simple spreadsheet to track the status of each transaction before tax season even starts. Here's what I do: Every time I sell something, I immediately check Fidelity's "Positions" page to see if that security shows up as "covered" or "non-covered" for cost basis reporting. I log this in my spreadsheet along with the basic transaction details (date sold, proceeds, my calculated gain/loss). Then when my 1099-B arrives, I can quickly cross-reference my spreadsheet against the "Cost Basis Reported to IRS" column to make sure everything matches up. Any "No" entries in that column go straight to the "needs code B on Form 8949" pile. This has saved me so much stress during tax season because I'm not scrambling to figure out which transactions are causing the "missing cost basis" warnings. Plus it helps catch any discrepancies between what I calculated during the year versus what shows up on the actual 1099-B. The whole system takes maybe 5 minutes per transaction when I sell, but saves hours of confusion in March/April!

Something no one mentioned yet - if you live in a state with income tax, you'll likely owe state taxes on gambling winnings too! Each state has different rules. For example, some states allow you to deduct losses like federal, others don't. Make sure you check your specific state's rules.

One thing that might help ease your mind - the $600 threshold is just a reporting requirement, not a withholding trigger. Most sports betting platforms won't automatically withhold taxes from your winnings unless you hit much higher thresholds (usually $5,000+ and certain odds ratios). However, you're still responsible for paying taxes on ALL your gambling income when you file, regardless of whether taxes were withheld. Since you're expecting to stay under $5,000 for the year, you probably won't have automatic withholding, but you should set aside about 20-25% of your net winnings to cover federal and state taxes. Also, make sure you understand the difference between gross winnings and net winnings. You can only deduct losses up to your total winnings if you itemize deductions, so if you win $4,000 but lose $3,000, you'd pay taxes on the full $4,000 but could potentially deduct the $3,000 in losses. Keep every receipt and record!

This has been incredibly helpful! I'm new to HCSMs (just joined Medi-Share this year) and had no idea about these tax implications. One thing I'm still confused about - what happens if you receive a reimbursement in a different tax year than when you paid the medical expenses? For example, if I paid $10,000 in medical bills in December 2024 but didn't receive the HCSM reimbursement until February 2025, which tax year does this affect? Also, I noticed some people mentioned keeping spreadsheets to track everything. Does anyone have a template they'd recommend? I want to make sure I'm documenting everything correctly from the start rather than trying to piece it together later. Really appreciate everyone sharing their experiences - this is exactly the kind of practical advice you can't find in the official IRS publications!

This thread has been incredibly informative! I've been a member of Christian Care Ministry for about three years now and have been handling the tax side of things completely wrong. I've been treating my monthly shares as medical expense deductions AND claiming the full amount of my medical expenses even when they were reimbursed. Looks like I need to file some amended returns! For anyone just starting with HCSMs, I'd strongly recommend setting up your tracking system from day one. I wish I had found this discussion three years ago - would have saved me a lot of headaches and probably some penalties. One additional tip based on my experience: make sure you understand the difference between "incidents" and individual medical expenses when tracking for taxes. My HCSM groups related expenses into incidents for sharing purposes, but for tax deduction purposes, you still need to track each individual expense and whether it was reimbursed. The incident grouping can sometimes make it confusing to figure out exactly which specific expenses were covered versus not covered. Also, don't forget about things like mileage to medical appointments, prescription costs, and medical equipment - these often get overlooked but can add up to significant deductible amounts if they weren't reimbursed by your HCSM. Just make sure you're following the same rule: only deduct what you actually paid out of pocket after all reimbursements.

This is exactly the situation I found myself in a few years ago! The key insight that saved me was understanding that S-Corp taxation is rigid - profits MUST flow through based on ownership percentages, period. You can't change that. However, you have flexibility in how you get compensated BEFORE those profits are calculated. Here's what worked for me: 1) **Salary adjustment**: Document your actual role and responsibilities, then research market rates for similar positions. If you're doing $50K worth of work but only getting paid $30K salary, increase it to market rate. This reduces company profits before the 98/2 split. 2) **Track your basis religiously**: Start now, even if you have to reconstruct it. Your basis increases by your K-1 income each year and decreases by distributions. Once it goes negative, all future distributions are capital gains until you build it back up. 3) **Consider the gift tax implications**: If you're taking distributions beyond your ownership percentage, your brother is essentially gifting you money. This might have gift tax consequences for him if the amounts are large. The harsh reality is there's no magic way to avoid this fundamental issue - either increase your ownership percentage, increase your salary to reflect your actual contribution, or accept that excess distributions will have tax consequences. Don't try to get too creative with the accounting - the IRS has seen every trick with S-Corps and family businesses. Keep it clean and defensible.

This thread has been incredibly helpful! I'm dealing with a similar situation in our family S-Corp where I'm a 15% owner but contribute much more labor than that percentage would suggest. One thing I learned from our tax attorney that might help: if you're genuinely performing services worth more than your current salary, the IRS actually WANTS you to pay reasonable compensation. They're more concerned about S-Corp owners who try to minimize salaries to avoid payroll taxes than those who pay market rates. We documented my role with job descriptions and used salary surveys from the Department of Labor and industry associations. When we increased my salary from $35K to $65K (which was actually conservative for my responsibilities), it reduced company profits by $30K before the ownership split, which was exactly what we needed. The key is having solid documentation showing the salary increase reflects actual market compensation for work performed, not just a tax strategy. We kept detailed records of hours worked, responsibilities, and comparable positions at similar companies. As for basis reconstruction - it's definitely worth doing even if you have to go back years. I had to reconstruct 8 years of basis calculations using old tax returns and bank records. It was tedious but revealed I had been unknowingly taking distributions that exceeded my basis for three years. Getting this cleaned up before an audit was invaluable. The biggest surprise was learning that my excess distributions should have been reported as capital gains on Schedule D all along. We had to file amended returns, but it actually resulted in lower total tax liability than the way we had been handling it.

I had the exact same issue last year! I used H&R Block, uploaded Form 8332 for my daughter, and was told they'd mail the 8453. Six months later, my ex got a letter from the IRS saying the dependency exemption was denied because they never received the form. When I went back to H&R Block, they admitted they "couldn't find any record" of mailing it. I ended up having to file an amended return and mail everything myself with certified mail. H&R Block did cover the fees for the amendment since it was their mistake, but it was a huge hassle. Definitely don't just trust that they're handling it!

This is such a frustrating situation that unfortunately happens more often than it should. I work as a tax compliance specialist and see this exact issue regularly. Here's what you need to know: 1. **Immediate action needed**: Don't wait any longer. Contact H&R Block's office manager (not just any employee) and demand written confirmation that your Form 8453 with attached Form 8332 was mailed, including the date and IRS processing center address. 2. **If they can't provide proof**: Mail the forms yourself immediately with certified mail. You can still submit Form 8332 even after the original return was filed - just include a cover letter explaining the situation. 3. **Timeline matters**: The IRS typically processes these within 6-8 weeks once received. If your ex filed claiming the dependency exemption without the supporting form, his return might be in "pending" status or he could receive a notice requesting the documentation. 4. **Protect yourself**: Going forward, always request a copy of Form 8453 and tracking confirmation for any mailed documents. Many preparers are supposed to provide this automatically but don't always follow through. The good news is this can still be fixed, but time is critical. Don't let H&R Block's confusion delay your action any further.