Just want to clarify something important that might affect your decision - you mentioned your grandmother "gifted" you the property, but then later referred to it as "inherited." This distinction is crucial for tax purposes. If your grandmother gave you the property while she was still alive (a lifetime gift), you receive her original basis of $190,000, which means you'd face capital gains tax on $285,000 ($475,000 current value minus $190,000 basis) if you sell. However, if you actually inherited the property after your grandmother passed away, you would receive a "stepped-up basis" equal to the fair market value at the time of her death. This could significantly reduce or even eliminate capital gains taxes depending on how much the property has appreciated since then. Could you clarify whether this was a lifetime gift or an inheritance? This will completely change the tax analysis and optimal strategy for transferring to your LLC. If it was truly inherited, you might have much more flexibility in your options without triggering substantial tax consequences.

@Diego Mendoza - I think everyone's right to focus on clarifying whether this was a gift or inheritance, but I want to add another angle to consider. Even if it was a lifetime gift with carryover basis, you might still have options to minimize the tax hit. One strategy I've seen work is doing an installment sale to your LLC spread over several years. This lets you recognize the capital gains over time instead of all at once, which can help manage your tax brackets and potentially keep you in lower capital gains rates. You'd need to structure it properly with adequate interest rates and realistic payment terms, but it could be worth exploring. Also, since you mentioned this is for real estate investment purposes, have you looked into whether you qualify for any of the real estate professional tax benefits? If you materially participate in real estate activities, you might be able to offset some of the capital gains with depreciation from other rental properties or real estate losses. The key is getting all your facts straight first (gift vs inheritance, exact basis, current FMV) and then modeling out the tax consequences of different approaches before committing to any particular strategy. A good tax professional who specializes in real estate can probably run scenarios for you showing the total tax cost of each option.

Just a heads up for anyone applying for an ITIN - the process is taking MUCH longer than usual right now. I applied in September and just got my number last week (almost 4 months later!). The IRS website says 7-11 weeks but that seems to be pre-pandemic timing. Plan accordingly if you need your ITIN by a specific date! Also, TRIPLE check your application for errors. My roommate's application was rejected because he didn't check one of the little boxes in section 6d. Such a small error caused a 2-month delay for him.

Rita, I went through this exact same process last year as an international student from India! I was terrified about mailing my passport too. Here's what I learned that might help you: You definitely have options beyond mailing your original passport. I ended up going to an IRS Taxpayer Assistance Center (like Khalid mentioned) and they verified my documents in person - no appointment stress since I called well in advance. The whole appointment took maybe 30 minutes. For your situation as a student receiving a taxable stipend, you'll likely qualify for Exception 1(a) which allows you to apply for the ITIN along with your tax return. But since you mentioned getting the stipend soon, you might want to apply now under Exception 2(c) if you're receiving any kind of scholarship or fellowship income. One tip that saved me: bring extra copies of everything to your appointment or Certifying Acceptance Agent visit. I brought like 3 photocopies of my passport, visa, I-20, and any other supporting docs. The agent kept one set and I got to keep my originals and the other copies. The whole process took about 9 weeks for me (this was last spring), but like Lena mentioned, it's taking longer now. Start as early as you can! Good luck with everything - you've got this! 🙂

I'm a software developer who switched from 1099 to LLC with S-Corp election last year. Here's what I've learned: 1. The tax savings are real but so are the costs. I save about $4,800/year in SE taxes but pay about $1,200 in additional expenses (payroll service, registered agent fee, additional tax prep fees). 2. The paperwork is a pain. Quarterly payroll filings, annual reports to the state, separate business bank account, more complex tax returns. 3. For me it was worth it financially, but the time cost is significant too. I spend about 5-6 hours per month on additional paperwork I didn't have as a 1099 contractor. 4. One unexpected benefit: clients take me more seriously as an LLC and I've been able to raise my rates by about 15%.

Great discussion everyone! As someone who made the switch from 1099 to LLC with S-Corp election about 18 months ago, I can confirm most of what's been shared here is accurate. My net savings ended up being around $3,200 annually after all additional costs. One thing I'd add that hasn't been mentioned much - timing matters a lot. If you're going to make the switch, it's usually best to do it at the beginning of a tax year rather than mid-year. The pro-ration of salary vs distributions gets messy when you switch partway through. Also, don't underestimate the importance of keeping meticulous records once you go S-Corp. The IRS scrutinizes these entities more closely, especially around reasonable compensation. I keep a detailed log of my hours, responsibilities, and comparable salary data for my industry just in case. For what it's worth, at your $78K income level, you're right at the sweet spot where it starts making sense financially. Just make sure you factor in your state's requirements too - some states have additional fees or taxes for LLCs that can eat into the federal savings.

4 Has anyone used TurboTax or similar software for filing back taxes? Or do you need to go through a tax professional? I'm in a similar situation (missing 2019-2020) and trying to figure out the cheapest way to get caught up.

I'm in a very similar boat - didn't file 2018-2020 and just got caught up on recent years. One thing I learned that might help you: if your income was under the filing threshold for those years (around $12,200 for single filers in 2017-2019), you technically weren't required to file. But even if that's the case, filing can still be beneficial. Here's what I'd recommend: start by requesting your wage and income transcripts from the IRS for those years to see exactly what income was reported. This will help you determine if you actually owe anything or if you might be due refunds you didn't expect. For your financial aid situation, while FAFSA mainly looks at the prior-prior year, some schools do ask for additional tax information during verification. Having everything filed removes any potential roadblocks there. The peace of mind factor is huge too. I was constantly worried about getting a letter from the IRS, and filing those back years eliminated that stress completely. Even if your tax guy thinks it's unnecessary, it's your call - and honestly, a good tax professional should support getting you fully compliant rather than questioning it.

Don't overthink this! I formed my LLC 2 years before I made a single dollar. Just keep your business and personal finances separate from day one (separate bank account is a must), track all expenses meticulously, and save receipts for everything. For accounting software, check out Wave - it's completely free for basic accounting and receipt tracking. You can connect your business bank account and it'll pull in all transactions automatically. When you start making money, I'd recommend getting professional help around the $5k revenue mark. Before that, most accountants will charge you more than they're saving you.

I'll add another perspective as someone who went through this exact situation with my SaaS startup. You're absolutely right to form the LLC before launching - it's completely legal and actually smart business planning. One thing I wish I'd known earlier: consider getting an EIN (Employer Identification Number) from the IRS as soon as you form your LLC, even before you have revenue. It's free, takes about 15 minutes online, and you'll need it to open your business bank account anyway. Having the EIN also means you won't have to use your SSN for business purposes, which adds another layer of personal protection. For your subscription model specifically, make sure you understand the difference between cash and accrual accounting methods. Since you'll likely be collecting monthly payments, this could affect when you report income for tax purposes. Most small businesses can use cash accounting (report income when received), but it's worth confirming with a professional once you start generating revenue. Also, don't forget to check if your city or county requires a business license for your type of service. This is separate from the LLC formation and varies widely by location and business type. Some areas require it before you start operating, even in the pre-revenue phase. You're taking the right approach by planning to bring in professional help once you have steady income. Just make sure you're documenting everything from day one - it'll save you money when you do hire that accountant!