I'm also a non-resident seller and got my ITIN last year. One thing nobody mentioned yet is that many tax treaties only reduce withholding on certain types of income, not all. For example, royalty rates might be reduced but not service income. So even with a tax treaty, understanding exactly what your income is classified as is super important. For non-treaty countries, getting an ITIN is still valuable because: 1) You can file a tax return and potentially get some withholding refunded 2) Some platforms have their own policies that reduce withholding for ITIN holders regardless of treaty status 3) It simplifies any future US tax obligations Just make sure to research the specific policies of your selling platform!

As someone who just went through this process successfully, I can confirm you're absolutely eligible for an ITIN! I'm from a country without a US tax treaty and was in the exact same situation with 30% withholding on my digital product sales. Here's what worked for me: First, you'll need Form W-7 (ITIN application) along with supporting documents that prove your identity and foreign status. The key is including a clear explanation letter stating you need the ITIN because you're receiving US-source income subject to withholding and plan to file annual tax returns. Once you get your ITIN, you'll file Form 1040-NR annually and provide your platform with Form W-8BEN that includes your ITIN. This should reduce or eliminate the 30% withholding depending on your platform's policies. The whole process took about 8 weeks for me, and I went from 30% withholding to around 12% effective tax rate after filing my return. Definitely worth the effort! Just make sure to use a Certifying Acceptance Agent if available in your country so you don't have to mail original documents.

I made a similar mistake but much worse - $1,200 error on my 8949 that DID affect my tax liability. I didn't catch it until this year. The main difference between your situation and mine is that mine actually changed how much I owed, so I absolutely had to amend. The IRS actually caught it themselves and sent me a notice, which led to penalties and interest. For your $30 error that doesn't change your tax liability, even my CPA said not to bother amending. He explained that the IRS systems are designed to catch errors that impact how much tax you paid, not minor reporting errors that don't affect your bottom line. Just use the correct carryover amount going forward and you'll be fine!

I'm going through something very similar right now! I found a $25 error on my 2022 Form 8949 where I miscalculated a capital loss. Like you, I was already at the $3,000 limit so it wouldn't change my refund at all. After reading through all these responses and doing some research, I've decided not to amend. The consensus seems clear - when there's no tax liability impact, the IRS really doesn't care about these small reporting errors. What I'm planning to do is exactly what several people suggested: use the correct capital loss carryover amount on my 2023 return. I'll keep documentation of the error in my tax files in case I ever need to explain the discrepancy, but I won't file an amended return. It's kind of a relief to know that perfectionism isn't always necessary when it comes to taxes, especially for these minor errors that don't affect what we actually owe or get refunded. Thanks for asking this question - it helped me figure out what to do with my own situation!

Another option is to have your friend open an account at your bank. My credit union gives me access to the first $500 of any check immediately, and the rest clears in 1-2 days max. Much better than dealing with this tax confusion.

I've been in a similar situation helping my sister with her checks from her part-time job. What really helped me was keeping simple records of these transactions - just a note in my phone showing the date, check amount, and that I gave her the full cash amount. From everything I've researched and the responses here, you're definitely not creating taxable income for yourself since you're not keeping any of the money. The IRS looks at economic substance, not just which account money flows through temporarily. One practical tip: if your friend's bank is consistently putting long holds on his paychecks, he might want to ask his employer about direct deposit. Most payroll companies can set that up pretty quickly, and it would eliminate the whole check-cashing issue entirely. Direct deposits usually clear much faster than paper checks.

Great to see you're getting this sorted out! Just one more thing to double-check when you meet with your tax preparer tomorrow - make sure they're looking at the correct carryover amount from last year. Sometimes the loss carryover amount on your prior year return might be different from your actual realized losses if you had other gains that year that already offset some of the losses. The carryover amount should be shown on Schedule D from your prior year return, usually on line 16. That's the exact amount available to offset this year's gains. If your preparer is working from a different number, that could explain some of the confusion. Also worth asking them to walk you through the actual calculation on Schedule D so you can see how they're applying the carryover. Sometimes seeing the math laid out makes it much clearer what's happening. Good luck with the meeting!

One more thing to consider - if you're working with a tax preparer who doesn't fully understand capital loss carryovers, you might want to bring some documentation to your meeting tomorrow. The IRS has a pretty clear explanation in Publication 550 (Investment Income and Expenses) that spells out exactly how capital losses can offset capital gains without the $3,000 limit. Also, make sure your preparer is using the correct Schedule D form for the current tax year. Sometimes software glitches or using outdated forms can cause confusion about how carryovers are applied. You should be able to see line by line how your $135k carryover loss is being applied against your $125k gain. If they still insist you can only use $3k, ask them to show you the specific tax code or IRS publication that supports that position. There isn't one, because capital losses can fully offset capital gains. The $3k limit only applies to excess losses against ordinary income like wages or interest.

Has anyone used TurboTax to claim a large worthless stock loss like this? I'm wondering if the regular version handles this or if I need to upgrade to their premium version. Last time I tried to enter something complicated like this, it kept giving me errors.

I'm sorry to hear about your situation with the First Republic Bank stock. This is unfortunately becoming more common with recent bank failures. One thing I'd add to the excellent advice already given - make sure you have proper documentation of the inheritance date and fair market value at that time. Since you inherited this 4 years ago, you'll need records showing the stock's value on the date of your family member's death (or the alternate valuation date if the estate elected that). This becomes your "stepped-up basis" for tax purposes. Also, don't rush to sell immediately. First Republic Bank went through a specific FDIC resolution process when it failed in May 2023, and shareholders typically received nothing. However, you should verify with your broker that there truly are no residual distributions expected before claiming it as completely worthless. If you do need to execute a sale, most brokers can handle transactions in defunct securities - they'll often sell for $0.01 per share or similar. The key is having the transaction recorded properly so you have documentation of the sale for your tax return. Given the size of this loss, I'd strongly recommend consulting with a tax professional who has experience with worthless securities and inheritance situations. The $417,000+ loss could provide significant tax benefits over many years if handled correctly.