My CPA told me that most real estate partnerships are considered "trades or businesses" by the IRS even if they're just holding properties for appreciation. The activities involved in selecting properties, managing investments, etc. often cross the threshold into business activities. If you're really trying to avoid SE tax, have you considered restructuring as an S-Corp instead? The partnership could distribute profits as distributions rather than guaranteed payments which wouldn't be subject to SE tax.

The Section 707(c) analysis is crucial here, but there's another angle to consider - the "material participation" test from Section 469. Even if your partnership is primarily holding real estate investments, if the partner receiving guaranteed payments materially participates in the partnership activities (which could include investment selection, property management decisions, financing arrangements, etc.), those guaranteed payments will likely be subject to SE tax. The IRS has been pretty aggressive in recent years about treating real estate investment activities as trades or businesses, especially when there's active management involved. Even if you're holding properties long-term, activities like tenant relations, maintenance oversight, refinancing decisions, or regular investment analysis can push you into "business" territory. Before restructuring, I'd strongly recommend getting a private letter ruling from the IRS if the amounts are significant. The cost of the ruling might be worth it compared to potential penalties and interest if you guess wrong on the SE tax treatment.

As someone who used to volunteer with VITA (Volunteer Income Tax Assistance), I'd really encourage you to visit a VITA site for your situation. Look up "VITA free tax prep" and your city to find locations near you. Your case is complex and needs personal attention since it involves potential dependent claims as a minor. VITA volunteers are specially trained for situations like yours, particularly for lower-income families. They'll help determine if you can claim your siblings or if your mother should file even with only SSI income (sometimes filing is beneficial even without tax liability).

Just FYI - my cousin was in almost this exact situation (she was 17), and when she tried to claim her younger siblings, her return got flagged for review and was delayed by months. The IRS eventually allowed it after she submitted additional documentation, but it was a huge hassle. You might want to file on paper with a detailed explanation letter attached to avoid automatic rejections if you go this route.

Can someone explain how capital gains are currently taxed vs regular income? This seems to be at the heart of the whole billionaire tax debate but I'm confused about the actual numbers.

As someone who works in financial planning, I think it's important to note that Buffett's advocacy for higher taxes on the ultra-wealthy isn't just about fairness - it's also about economic stability. When wealth becomes extremely concentrated, it can reduce consumer spending (since wealthy individuals save a higher percentage of their income) and limit economic mobility for everyone else. The current system essentially subsidizes wealth accumulation through preferential capital gains treatment while heavily taxing work through payroll and income taxes. A 60% marginal rate on very high incomes would likely only affect a few thousand Americans but could generate significant revenue for infrastructure, education, and other investments that benefit the broader economy. What's particularly interesting is that many billionaires like Buffett, Gates, and Munger have argued that higher taxes wouldn't significantly impact their standard of living or business decisions. When you have $100 billion, paying an extra $1-2 billion in taxes doesn't change your day-to-day life, but it could fund programs that help millions of Americans build wealth and contribute more to the economy.

Make sure you're also documenting this for next year's taxes. If you don't recover anything from this loss, you might still have tax implications going forward. For example, if you ever do recover any money (either through insurance, legal action, or even if the authorities manage to recover any funds), that recovery would typically be taxable in the year received unless you didn't get a tax benefit from the loss. Also, depending on how much you initially invested versus your reported losses, you might need to deal with "phantom income" issues if you ever claimed any gains from these fake investments on previous tax returns.

I'm so sorry you're going through this - losing that much money to a scam is absolutely devastating. Beyond the tax implications others have mentioned, I'd also recommend checking if you qualify for any victim assistance programs. The FTC has resources for fraud victims, and some states have victim compensation funds that might help with recovery costs. Also, make sure you're working with the FBI's Internet Crime Complaint Center (IC3) if you haven't already. They've been more successful lately at tracking down crypto scammers, especially when there are multiple victims of the same scheme. Sometimes they can freeze assets or work with exchanges to recover funds. For the tax side, definitely keep every single piece of documentation - not just the obvious stuff like bank statements, but also things like your phone records showing when calls were made, any emails about the "investment platform," and screenshots of your research into the company (if you did any). The IRS will want to see evidence that you performed due diligence as a reasonable investor would, which helps distinguish this from just a bad investment decision. One more thing - if you used credit cards for any of the transfers, contact those companies immediately. Some credit card companies have fraud protection that might cover at least some of the losses, especially if you can demonstrate you were deceived about what you were purchasing.

My friend works there and said there system was down last week. Might explain the delay

Still waiting on mine from AMN too! Called payroll yesterday and they said they're having "technical difficulties" with their tax document system. Supposedly should be resolved by end of week. Meanwhile I'm just sitting here watching everyone else file their returns 😤