One thing to consider with mortgage payoffs before a 1031 exchange that nobody's mentioned yet - if your existing mortgage has a prepayment penalty, that penalty is NOT considered part of your exchange basis. I found this out the hard way and ended up with a $3,800 penalty that I couldn't roll into the 1031. Check your mortgage terms carefully!

This is a really thorough discussion! Just wanted to add one more consideration that might be relevant - the timing of when you actually pay off the mortgage versus when you start the 1031 exchange process. I'm dealing with a similar situation right now and my qualified intermediary advised me to coordinate the mortgage payoff timing carefully with the exchange timeline. If you pay off the mortgage too far in advance of listing the property, it could raise questions about your intent to do a 1031 exchange from the beginning. The IRS likes to see that your 1031 exchange was planned as part of an investment strategy, not something you decided to do after the fact. So while paying off the mortgage before the exchange is totally fine from a tax perspective (as others have confirmed), just make sure you can document that the 1031 was always part of your plan. My QI suggested keeping records showing I was researching replacement properties and consulting with them before paying off the mortgage, just to establish the timeline clearly. Probably overkill, but better safe than sorry with the IRS!

When I had a similar W2c issue, TurboTax had a specific section for entering W2c information. Is anyone using a particular tax software that handles this well? My accountant charged me extra last year because of all the corrected forms and I'm trying to DIY this year.

I went through this exact same situation two years ago! The key thing to remember is that the W2c completely replaces the information on your original W2. You should only use the corrected information when filing - so yes, use code W with the $13,340 amount. The reason for the code change makes total sense too. Code D is for your own 401(k) deferrals (money taken out of your paycheck), while code W is for employer HSA contributions (money your company puts into your HSA account). Your payroll department probably miscoded it initially. One thing that helped me was calling my HR department to confirm what actually happened. In my case, they had incorrectly categorized the employer's HSA contribution as a 401(k) deferral on the original W2. The good news is that employer HSA contributions (code W) are generally more favorable tax-wise since they don't count as taxable income at all. Make sure whatever tax software you're using has an option for entering W2c information specifically - don't just manually change the numbers from your original W2 entry.

Has anyone used TurboTax to report this kind of situation? I'm having trouble finding where to manually enter a 1099-R that I haven't received yet.

One thing that might help ease your concerns - I had almost the exact same situation last year. Made an excess contribution, caught it early, removed it before the deadline, but didn't get the 1099-R until the following January. I filed my taxes self-reporting the distribution with code P just like you're planning to do. When I eventually received the official 1099-R the next year, all the numbers matched perfectly with what I had self-reported. No issues, no amended returns needed. The key is being accurate with your amounts and using the correct distribution code. Since you documented everything and have your broker statements showing the withdrawal, you should be fine. Just make sure to keep all those records in case the IRS ever asks for verification down the road. Your approach with the $740.25 withdrawal amount is correct - you only need to remove what's actually there after any investment changes. Good luck with your filing!

Pro tip: The best way to understand your 810 freeze is to use taxr.ai - way better than trying to piece together info from random reddit posts. It costs $1 but gives you a complete analysis of your transcript and estimated resolution date. Been using it weekly to track my progress.

Filed 1/15 and been dealing with 810 freeze for over 3 weeks now. WMR hasn't budged from "still processing" but my transcript shows the freeze code. Really hoping to see some movement soon - bills don't stop coming just because the IRS is taking their sweet time! Has anyone noticed any patterns with when these typically clear?

I'm going through the exact same thing right now - my refund was mailed 3/16 and still nothing in the mailbox. It's so nerve-wracking when you're depending on that money! I signed up for USPS Informed Delivery after reading these comments and that's been helpful to at least see what's coming each day. What I've learned from calling around is that IRS checks can take anywhere from 2-6 weeks depending on postal processing delays. I know it's frustrating (especially when caring for family like you are), but from everything I've read here and elsewhere, most people do eventually get their checks - they just take longer than we'd hope. If nothing shows up by next Friday (which would be about 3 weeks), I'd definitely start the process of calling the IRS. Hang in there!

I feel for you - the uncertainty is the worst part when you're caring for family and need that money. I went through something similar last year where my check took almost a month to arrive. A few things that helped me stay sane: First, I called my local post office and they confirmed that Treasury checks sometimes get extra security screening which can add 5-7 days. Second, I started checking my mailbox at different times since sometimes the mail carrier delivers later in the day. Third, I made sure to check with all my immediate neighbors in case of misdelivery. The good news is that based on everyone's experiences here, checks mailed mid-March are still well within the normal delivery window. I know waiting is brutal when you're worried about your mom, but try to give it until early next week before calling the IRS. Most people in your situation do get their checks - they just arrive later than expected.