Does anyone know if trading losses from section 1256 contracts are considered investment income for the Net Investment Income Tax (3.8% tax)? My CPA says I can use these losses to offset other investment income subject to NIIT, but I'm not sure.

I went through a very similar situation last year with K-1s showing section 1256 losses, and I can share what I learned after consulting with a tax professional. The good news is that section 1256 contract losses from partnerships are generally NOT subject to the passive activity loss limitations, even if you're not actively involved in managing the partnership. This is because they're treated as investment/trading losses rather than passive business losses. For the basis limitation, if your combined capital accounts show $45k positive after the losses, you almost certainly have sufficient basis to claim the full $16k in losses. The key thing to watch for is whether you received any distributions during the year that might have reduced your basis below what's shown in the capital account. Here's what I'd recommend: 1. Report the 1256 losses on Form 6781 as you mentioned (60% long-term, 40% short-term) 2. Check if either partnership sent supplemental statements about distributions or basis adjustments 3. If you're still unsure about your exact basis calculation, consider keeping detailed records going forward since basis carries over year to year The partnership loss limitation rules are definitely confusing when you first encounter them, but for your specific situation with investment partnerships and 1256 contract losses, they're likely not going to be a major obstacle.

Has anyone used MileIQ app for tracking? I've been using it for about 6 months and it automatically tracks my drives and lets me swipe left for personal or right for business. Wondering if the logs it generates are sufficient for tax purposes?

Great question! You're definitely on the right track with tracking both mileage and meals. Just wanted to add a few practical tips from someone who's been through several tax seasons with similar deductions: For your mileage log, what you're doing is solid, but consider adding the specific business purpose for each trip (like "client consultation," "project delivery," etc.). The IRS likes to see WHY the trip was necessary for business. Also, keep your odometer readings consistent - some people get tripped up by forgetting to record the ending mileage. One thing I learned the hard way: if you're meeting clients at restaurants, make sure you're actually discussing business during the meal. The IRS can be picky about meals that are purely social vs. those with a legitimate business purpose. I always jot a quick note on the receipt about what we discussed. Since you're new to this, consider setting up a simple system now - maybe a dedicated folder for receipts and a consistent format for your mileage log. It'll save you tons of time come tax season. And definitely keep everything for at least 3 years in case of an audit!

Has anyone successfully reported a company to the IRS for not sending 1099s? I'm in a similar spot with FOUR different companies who haven't sent mine. Getting really fed up with chasing them down every year.

I'd recommend filing with your bank statement records rather than waiting any longer. You've already made good faith efforts to get the 1099, and February is getting late in the filing season. One additional tip - when you report this as "Other Income" on Schedule 1, make a note in your records about the missing 1099 situation. If the IRS ever questions it, you'll want to show you attempted to get the proper documentation. Also consider sending one final certified letter to the company requesting the 1099 - this creates a paper trail showing you tried to resolve it properly. The most important thing is that you report the income accurately. The IRS cares more about you reporting what you earned than whether you have the physical form. Your bank statements showing $3,750 in deposits from this supplier are perfectly acceptable documentation.

Just a random thought - does anyone remember which tax software handled the COVID questions the best back in 2021-2022? I used H&R Block online and felt like their COVID sections were super confusing and poorly explained. Wondering if I should switch to something else this year.

Just to add to what others have said - you're definitely not alone in being confused about the COVID tax credits! The situation was really complicated because there were so many different programs with different eligibility rules and deadlines. For your specific situation in 2021 when you missed work due to COVID, unfortunately as an employee who used vacation time, you wouldn't have qualified for the self-employed sick leave credits that some people are mentioning. Those were specifically for people who were self-employed or independent contractors. The main things you might have missed would be the stimulus payments (Economic Impact Payments) - there were three total: $1,200 in 2020, $600 in late 2020/early 2021, and $1,400 in 2021. If you only remember getting one in 2020, you might want to check your old bank statements or tax transcripts to see if you received the other two. You can request free tax transcripts from the IRS website to verify what payments they have on record for you. If you did miss any stimulus payments, you'd need to amend your 2021 or 2020 returns to claim them as Recovery Rebate Credits, but as others mentioned, you're running up against the 3-year deadline for amendments. For your current 2024 tax return, there shouldn't be any COVID-related credits to claim.

Has anyone used TurboTax for their vacation rental property? I'm wondering if it handles all these complex rules well or if I should just go straight to a CPA.

Great question! I'm actually in a similar situation - just closed on a mountain cabin that I plan to use personally about 3-4 weeks per year while renting it out the rest of the time. One thing that really helped me understand the classification was realizing that the 14-day rule is a hard limit - if you use it personally for more than 14 days, it's automatically considered a second home regardless of the percentage. But if you stay under 14 days, then the 10% rule kicks in. For your situation with a month of personal use, you're definitely looking at second home treatment. The good news is you can still deduct a lot! I've been tracking everything in a spreadsheet: property taxes, insurance, utilities, maintenance, repairs, furnishings, even things like cleaning supplies and toilet paper for guests. One tip I learned from my accountant - keep meticulous records of your personal use days vs rental days. The IRS can be pretty strict about this if you ever get audited. I actually keep a calendar specifically for the property marking personal vs rental use. The LLC question is interesting - I went with one mainly for liability protection since I'm having strangers stay in my property. It doesn't change the tax classification rules, but it does make me feel safer from a legal standpoint. Definitely smart to get professional advice before you finalize everything. The tax implications can really impact your cash flow projections!