Did your tax preparer need to see the 5498 form, or were they able to process everything with just the 1099-R and the documentation showing the transfer/merger?

My tax preparer didn't need the 5498 form at all. She was able to process everything correctly with just the 1099-R and my documentation showing the transfer happened because of the merger. She told me that tax preparers are very familiar with this situation and know exactly how to code it properly in the tax software. The 5498 forms are more for record-keeping and verification if the IRS has questions later, but they aren't necessary for preparing and filing an accurate return.

I used TurboTax last year for this exact scenario. It definitely handles it, but you need to make sure you answer the questions correctly. When it asks about your 1099-R, there's a specific question about whether you rolled over the distribution into another qualified retirement account. Make sure you say YES to that question, and it'll treat it as non-taxable. It'll also ask you to enter the amount rolled over, which should be the full amount from the 1099-R in your case.

No, her filing taxes doesn't automatically disqualify her as your dependent. As long as she meets all the tests (income under the limit, you providing more than half support, etc.), she can still be your dependent even while filing her own return. In fact, she SHOULD file for her 1099 work even if you claim her as a dependent - she's required to if her self-employment income is over $400 because of Social Security/Medicare taxes. She just needs to check the box that says "Someone can claim you as a dependent" on her return.

Is that still true with used car prices being so crazy lately? I sold my 3-year-old Toyota last year for more than I paid for it new. Do I owe taxes on that?

You're right about the unusual market conditions affecting this. If you sold your personal vehicle for more than you originally paid, then technically yes, you do have a taxable capital gain. Even though it's unusual for cars, the IRS doesn't exempt vehicle gains from taxation. The gain would be calculated as the difference between your original purchase price (your basis) and the selling price. And since you mentioned selling after 3 years, that would be a long-term capital gain, which generally has more favorable tax rates than short-term gains. Make sure to report it on Schedule D of your tax return.

Good point! I'm in New Jersey and had to pay state inheritance tax on my mom's car even though it wasn't valuable enough for federal estate tax. The thresholds are totally different.

No tax benefit to early repayment. The interest you pay goes back into your own account, but it's not deductible regardless of when you pay it. The "benefit" is just that you're paying yourself back sooner so that money can start growing again tax-deferred.

Thank you so much! Did your son end up owing more in taxes because of this change? That's my biggest worry right now. We're already struggling to help her make ends meet with that tiny stipend, and I'm afraid this change is going to mean she suddenly owes taxes that we didn't plan for.

He didn't end up owing more because the fundamental tax treatment of the stipend didn't change - just how the university reported it. Since he had already been reporting it as income all along (which was correct), there was no difference in his tax liability. If your daughter has been properly reporting her stipend as income on her tax returns in previous years, this reporting change shouldn't result in any additional tax burden. The key is that the tax treatment depends on the nature of the payment (compensation for services vs. scholarship), not on how the university chooses to report it on the 1098-T.

This is great advice. When my university changed how they reported my fellowship, I found out they had sent an email explaining the change that went to my spam folder. Might be worth having your daughter check if the university sent any communication about this change.