Has anyone considered that this might actually be intentional by the IRS? By sending refunds instead of applying them as requested, they create situations where people either have to scramble to make estimated payments or potentially face penalties later. Just saying...

I went through this exact same situation last year and it was incredibly frustrating! The IRS processed my return incorrectly despite me clearly marking the box to apply my overpayment to estimated taxes. Here's what I learned: Don't cash the check yet. Call the IRS directly (yes, the wait times are awful, but it's worth it) and explain that they sent you a refund check when you specifically requested the overpayment be applied to your 2024 estimated taxes. Have your Social Security number and the exact amount ready. When I called, the representative was able to see my original election on the return and confirmed it was their processing error. They had me write "VOID" across the check and mail it back with a letter explaining the situation. About 6 weeks later, I received confirmation that the amount had been properly applied to my estimated tax account. The key thing is that they noted in my file that this was their error, so there were no penalties for the "late" estimated payment. Keep detailed records of everything - your original return, the refund check, any correspondence with the IRS, and notes from phone calls including dates and representative names if possible. It's definitely their mistake, not yours, so don't let them try to penalize you for it later!

This thread is super interesting. I'm doing a taxation course and we just covered this topic. One thing not mentioned yet is that some businesses have tried to work around 280E by separating their business into multiple entities - one that "trafficks" and another that provides other services. For example, a dispensary might create one business that only buys/sells product (subject to 280E but can deduct COGS) and a separate consulting/education business that provides advice to customers (not subject to 280E, so can deduct all ordinary business expenses). The IRS has challenged these arrangements with mixed results. Has anyone looked into the success rate of these types of structures?

This is such a great breakdown of a really confusing area of tax law! I'm actually a CPA and I still have clients ask me about this all the time, especially with the growth of state-legal cannabis businesses. One thing I'd add is that the COGS vs. other expenses distinction can get really murky in practice. For example, trimming labor for cannabis can sometimes be considered part of COGS (as it's part of preparing the product for sale) but sometimes it's treated as a non-deductible operating expense. The IRS has been inconsistent on where exactly to draw these lines. I've seen businesses spend thousands on tax attorneys just to figure out how to properly categorize expenses under 280E. It's one of those areas where the law is clear in theory but gets incredibly complex when you try to apply it to real-world business operations. The constitutional reasoning behind allowing COGS deductions is solid, but the practical implementation creates a lot of gray areas that businesses have to navigate very carefully.

Does anyone know which form you use to report this? Is it just on Schedule D or is there another form for claiming the partial exclusion specifically?

Great question! Based on your timeline, you should definitely qualify for the partial exclusion. The key factors working in your favor: 1. **Work-related move qualifies**: Your job relocation is one of the IRS-recognized "unforeseen circumstances" that allows for partial exclusion even when you haven't met the full 2-year requirement. 2. **9 months of use counts**: You lived in the home as your primary residence from April-December 2021, which gives you 9/24 of the maximum exclusion (37.5% of $500k = $187,500 for married filing jointly). 3. **Rental period doesn't disqualify you**: The fact that you rented it out after moving doesn't affect your eligibility for the partial exclusion on the period when it was your primary residence. However, a few important points to remember: - You'll still owe depreciation recapture taxes on any depreciation claimed during the rental period (taxed at up to 25%) - Make sure you have good documentation of the job change, move dates, and occupancy periods - Consider having a tax professional prepare this return given the complexity of mixed-use property sales Your tax professional's assessment sounds correct. With a $180k gain ($675k - $495k), the partial exclusion should cover most or all of your capital gains tax liability, though you'll still have the depreciation recapture to deal with.

Ugh this is so frustrating! I filed on 1/20 too and got accepted the same day but still no advance. The whole "minutes after acceptance" thing feels like false advertising at this point. Really considering switching to a different service next year if they can't get their act together 😤

Been dealing with the exact same thing! Filed 1/19, accepted 1/21, and still waiting on my advance. Called CK support twice and got different answers each time - first they said "technical issues" then "additional verification needed." Really wish they'd be more transparent about what's actually causing these delays instead of keeping us in the dark. At this point I'm just hoping it shows up before the weekend 🤞

Just to clarify some confusion I'm seeing in other comments: Cycle code 0505 means your account is on a weekly processing cycle (05) that updates on Thursdays, and the 05 at the end indicates the year (2025 for 2024 tax returns). In my experience working with tax clients, PATH Act returns (with EITC/ACTC) filed in January typically complete processing by mid-March, but this year we're seeing longer delays across the board. The lack of an 846 code simply means your refund hasn't been scheduled yet - it doesn't necessarily indicate a problem.

I'm in a very similar situation! Filed on January 23rd with the same 0505 cycle code and PATH message. What I've learned from researching this is that the IRS is required by law to hold refunds with EITC or ACTC until at least February 15th, but this year they seem to be taking much longer than usual. I've been checking my transcript every Thursday night (that's when 0505 cycles typically update) and finally saw some movement last week - got a 766 credit code but still no 846. From what I understand, once you see the 846 code with a date, your refund should be deposited within 1-5 business days. The waiting is definitely frustrating, especially when you're counting on that money, but it sounds like we're both still within the realm of "normal" processing times for this year, unfortunately.