You're absolutely right about the confusion between §6046 and §958 - I went through this exact same issue last year. The key insight that helped me was understanding that these serve completely different purposes in the Form 5471 process. §6046 attribution rules (including sibling attribution) determine WHETHER you need to file as a Category 3 filer. But once you've established that filing requirement, you switch to §958 rules for completing the actual form content. For your Line C reporting, since you only own 6% directly and your brother's 51% isn't attributed to you under §958 (no sibling attribution), you'd report just your 6% ownership. This same principle applies throughout most of the schedules. The apparent inconsistency you noticed is intentional - the IRS uses broader attribution rules to cast a wide net for filing requirements, but then uses narrower economic ownership rules for the actual reporting. It's confusing but makes sense once you understand the distinction. One thing to double-check: make sure you're not also a Category 5 filer, though with only 6% direct ownership and no §958 attribution from your brother, you should be under the 10% threshold.

This is a really helpful discussion! I've been dealing with a similar situation where I own 8% of a foreign corporation and my sister owns 45%. Reading through all these responses, I finally understand the key distinction that was confusing me too. Just to confirm my understanding: I use §6046 attribution rules to determine I'm a Category 3 filer (because my sister's ownership gets attributed to me, putting me over the threshold), but then when I actually fill out Form 5471 and its schedules, I use §958 rules which don't include sibling attribution. So on Line C, I'd only report my direct 8% ownership. One follow-up question - does this same logic apply to Schedule M (Foreign Corporation's Current and Accumulated Earnings and Profits)? I'm assuming yes, but want to make sure there aren't any special exceptions for that particular schedule that would require me to go back to §6046 attribution rules. The penalties for getting Form 5471 wrong are steep enough that I want to be absolutely certain before filing. Thanks everyone for sharing your experiences and clarifications!

Quick question - if I set up my withholding to cover next year's taxes but already have the penalty this year, can I get the current penalty reduced or is it too late once you file?

I went through almost the exact same situation last year with CDs maturing unexpectedly! Here's what worked for me in TurboTax: 1. Definitely try the annualized income method as others mentioned - search for "Form 2210" in TurboTax and look for the checkbox to "use annualized income installment method." You'll need to break down when you received the CD interest by quarter. 2. Double-check the safe harbor rule. If your total withholding plus estimated payments equal at least 100% of last year's total tax (110% if your prior year AGI was over $150K), you should qualify even if it's less than 90% of this year's tax. 3. One thing I discovered - make sure TurboTax isn't double-counting any estimated payments you might have made. I had made one small estimated payment mid-year that I forgot about, and initially TurboTax missed it. 4. Also check if any of your CDs had tax withheld at the source - sometimes banks withhold federal tax on interest payments, which should count toward your payments for the year. The annualized method ended up reducing my penalty from about $600 to under $100. It's worth the extra effort to fill out those quarterly breakdowns!

Anyone know if the 2025 tax law changes will affect this at all? I heard some suspended deductions are coming back.

I went through something very similar last year and ended up working with a tax attorney who specializes in employment-related legal expenses. One thing that really helped my case was documenting exactly how the harassment was impacting my work performance and income potential. The key distinction the attorney explained is whether the legal fees were incurred to protect your ability to earn income versus just for personal protection. In my case, I had to show that the restraining order was necessary to maintain my employment and earning capacity, not just for general safety. We ended up being able to deduct about 60% of the legal fees on my California return by arguing they were directly related to income production. The documentation was crucial - I had emails showing how the harassment was affecting my work, performance reviews that mentioned the impact, and even some lost client interactions due to the situation. Worth noting that California's rules are more favorable than federal right now, so definitely explore both angles if you're in CA. The investment in getting proper tax advice paid for itself in my case.

If your return was accepted but now says "we may need more information," check if you claimed any of these credits, as they often trigger additional review: - Earned Income Tax Credit - Child Tax Credit - American Opportunity Credit - Premium Tax Credit (for health insurance) My return was held up last year because of EITC verification. Took almost 8 weeks total but eventually processed without me needing to do anything.

I'm going through almost the exact same situation! Filed through FreeTaxUSA about 5 weeks ago, got the initial acceptance, then that dreaded "we may need more information" message appeared. Haven't received any mail yet either. Reading through these comments has been incredibly helpful - I had no idea about the identity verification delays when switching from a professional preparer to self-filing. That's probably exactly what's happening since we used H&R Block last year. The 21-30 day processing time Brandon mentioned gives me some peace of mind that we're still within normal range, even if it feels like forever when you're counting on that refund. Going to check out that Treasury Offset Program number Axel mentioned just to rule out any debt issues, and might try the taxr.ai tool if we don't hear anything in another week or two. Thanks everyone for sharing your experiences - makes me feel a lot less alone in this waiting game!

Does anyone know if Robinhood gives you any warning when you're buying an MLP? I feel like they should tell you that you're buying something that's going to complicate your taxes before you purchase it.

I had this exact same situation happen to me! Bought what I thought were regular oil stocks on Robinhood and got blindsided by K-1 forms. Here's what I wish someone had told me from the start: 1. Yes, select "Partnership/LLC" in TurboTax - that's correct for the 1065 K-1 you received 2. MLPs (Master Limited Partnerships) are common in the oil/pipeline sector and they're taxed differently than regular stocks 3. Keep ALL your K-1 forms - you'll need them when you sell because the tax basis gets adjusted each year One tip that saved me a lot of headache: if the amounts are small (like under $1000 in income), the multi-state filing requirements others mentioned usually don't apply. TurboTax will calculate this automatically. Also, consider moving these investments to an IRA if you plan to keep them long-term. MLPs in retirement accounts avoid the K-1 hassle entirely (though there are some other considerations with UBTI if the amounts get large). Don't feel bad about not knowing - Robinhood really should warn people about this before purchase!