Mines been doing the same thing since March. Starting to think we're never getting our money back fr fr

what codes do u see on ur transcript? that matters more than the as of date tbh

Has anyone ever successfully used Form 8082 to take a position contrary to their K-1? My CPA says I should just go with what the partnership reports and not try to recharacterize anything on my personal return.

Your instincts are absolutely correct to question this approach. The self-rental rule is pretty clear - when you rent property to a business you materially participate in, that rental income becomes non-passive regardless of other elections or designations. This is codified in Reg. 1.469-2(f)(6) and is designed to prevent exactly what your CPA is suggesting. The Real Estate Professional safe harbor (Section 469(c)(7)) can help recharacterize your residential rental losses from passive to non-passive if you meet the 750-hour test and materially participate. However, this doesn't change the fact that your LLC #2 income from renting to LLC #1 is already non-passive due to the self-rental rules. Here's the key issue: even if both activities end up being non-passive, you still need to consider whether they can be properly grouped together under the activity grouping rules. The IRS looks at factors like geographical location, interdependence, and whether they form an "appropriate economic unit." Your CPA's immediate suggestion to file an extension when questioned is a red flag. A competent tax professional should be able to explain their reasoning clearly, especially on something as fundamental as passive activity loss rules. I'd strongly recommend getting a second opinion from a CPA who specializes in real estate taxation before proceeding with this strategy.

One thing nobody's mentioned is how this affects your ability to claim the Child Tax Credit if you have kids. If you use the FEIE, you can't claim the refundable portion of the CTC on the excluded income. So if you have children, you might actually be better off with the FTC in some cases. For example, I live in France with 2 kids and about €70,000 in income, plus some US dividends. When I ran the numbers, the additional Child Tax Credit I could claim using FTC outweighed the tax savings from the partial FEIE strategy. Has anyone else with children done detailed calculations on this? Would be interested to see if this holds true across different income levels and number of dependents.

This is such a valuable discussion! I'm a US citizen living in Australia and have been struggling with this exact decision. Reading through everyone's experiences, I'm realizing I need to factor in more variables than I initially thought. @Emily Nguyen-Smith and @James Johnson - your point about the Child Tax Credit is huge. I have one child and was leaning toward the partial FEIE strategy, but now I'm wondering if I should stick with FTC to preserve my ability to claim the full CTC. One question for the group: has anyone dealt with superannuation (retirement contributions) in Australia and how that interacts with these strategies? My employer contributes about AUD $8,000 annually to my super, and I'm not sure how that affects the foreign earned income calculation for FEIE purposes. Also wondering about the interaction with the Additional Child Tax Credit - if I use partial FEIE and keep some earned income for Roth IRA eligibility, does that preserved earned income count toward the ACTC calculation even though the rest is excluded? This thread has been incredibly helpful - it's clear there's no one-size-fits-all answer and the optimal strategy really depends on your specific situation including state taxes, number of dependents, and foreign tax rates.

Don't forget you can offset those winnings with losses, but only if you have proof! I learned this the hard way. Keep all your ATM receipts at casinos, player's card statements, even hotel bills that show you were there. If you're audited without proof, you're screwed.

Everyone here is giving tax advice but no one mentioned the most important thing - if you won exactly $1200 they probably didn't withhold any federal taxes! The casino is required to give you a W-2G but withholding is only mandatory on slots if you win over $5,000. Make sure you set aside money for taxes so you're not surprised at tax time!

Lots of other countries already do what you're suggesting! In the UK they have a system called PAYE (Pay As You Earn) where taxes are automatically calculated and withheld for most employees. Sweden, Denmark, and Spain all send pre-filled tax returns to citizens - you just verify the information and submit. The US system is deliberately kept complex and manual. The technology for automated taxes has existed for decades.

This is exactly why I've been pushing for return-free filing for years! As a tax professional, I see how unnecessarily complicated we've made something that could be simple for most Americans. The IRS already has the capability to pre-populate returns - they actually tested a pilot program called "Ready Return" in California back in 2006 that worked great. Participants loved it and it had a 99% accuracy rate. But it was killed due to industry pressure. For about 70% of taxpayers who take the standard deduction and have straightforward income, the math is already done. The IRS knows your wages, interest, and most other income sources. They could easily send you a pre-filled return to review and approve, just like other countries do. The real barrier isn't technical - it's political. We need to demand that our representatives prioritize taxpayer convenience over corporate profits from the tax prep industry.