Just want to add something important - if you're claiming the Child Tax Credit with no income, make sure your child has lived with you for more than half the year (183 days). The IRS is really strict about this requirement, and it's one of the things they check carefully since this credit is frequently claimed incorrectly. Also, your child needs to be under 17 at the end of the tax year to qualify. If they turned 17 during 2023, unfortunately you can't claim the Child Tax Credit for them for that year.

I did this exact thing last year! Filed with zero income as a disabled parent and still got $1,500 for my daughter through the Additional Child Tax Credit. Used the free version of TaxAct to file. Just make sure to complete Schedule 8812 along with your 1040 - that's where you calculate the refundable portion. One thing nobody mentioned yet - your qualifying child must also not provide more than half of their own support. Shouldn't be an issue for young kids, but something to keep in mind if you have an older teen who might have had some income of their own.

Pro tip: sign up for informed delivery with USPS so you know when its coming

Just went through this last year - can confirm it's always a paper check for 1040X refunds. The IRS systems don't link your amended return to your original direct deposit info for security reasons. Since you mentioned it's a big amount, definitely set up that USPS Informed Delivery like Axel suggested. Also keep checking "Where's My Amended Return" on the IRS website for status updates. The wait is painful but hang in there!

I see so many of these stories lately! The IRS systems are completely overwhelmed and their error rate seems to be getting worse. One thing to consider if this doesn't get resolved quickly - the Taxpayer Advocate Service can help with these kinds of issues, especially when there's a risk of financial hardship. They're an independent organization within the IRS. Just remember to document EVERYTHING. Every call, letter, the name of every IRS employee you speak with, dates, times - create a paper trail so detailed that nobody can question your due diligence. It might seem excessive, but if this drags on, that documentation will be your best defense.

I'm glad to see you're making progress on this! Just wanted to add a few more tips that helped me when I dealt with a similar CP2000 issue: 1. When you send your written response, use certified mail with return receipt requested. This gives you proof the IRS received it and when. 2. Keep calling that same IRS number periodically to check on the status. Sometimes these cases get stuck in the system and a follow-up call can move things along. 3. If you haven't already, pull your Social Security earnings record from ssa.gov to verify what employers actually reported wages under your SSN. This can help identify if there are other discrepancies you're not aware of. The fact that they already identified it as a clerical error with someone else's information is a great sign. Usually once they acknowledge the mistake internally, the resolution moves pretty quickly. You should be in the clear soon!

Building on the excellent advice already given, I want to emphasize a few critical points that could save you significant headaches: First, regarding the estate vs. direct distribution issue - while technically the promissory note should have gone through probate as personal property, the practical impact may be minimal if beneficiaries are receiving their correct proportional shares. However, you should definitely consult with your estate attorney about whether to file a Form 1041 for the estate or issue K-1s to beneficiaries. This decision affects where the tax liability sits. Second, the step-up basis issue is unfortunately clear-cut - installment obligations don't receive step-up treatment under IRC Section 1014(c). The original sale created the installment obligation, and that's what was inherited, not the underlying property. Even with the security interest, you inherited the right to payments, not ownership of the real estate. For reporting, you'll need your father's final Form 6252 to determine the gross profit percentage that continues to apply. Each payment you receive will be split between: (1) return of basis (not taxable), (2) gain recognition (capital gains), and (3) interest (ordinary income). Given the multi-state complexity (NC/WV) and the estate administration questions, I'd strongly recommend getting professional help from a tax attorney or CPA experienced with installment sales and estate taxation. The potential tax savings from proper planning could easily justify the professional fees. One last note - make sure you're keeping detailed records of all payments received and how they're being distributed among beneficiaries. The IRS will want to see this documentation if they ever examine the returns.

I'm dealing with a somewhat similar situation right now with my mom's estate, and I wanted to share a few additional considerations that might help. One thing I learned from my estate attorney is that even though you've been distributing payments directly to beneficiaries, you might want to consider having the estate "adopt" those distributions retroactively through proper accounting entries. This can help establish a clear paper trail showing the estate received the income and then distributed it, which might be cleaner for tax reporting purposes. Also, regarding the WV/NC state tax issue - I'd definitely recommend checking if West Virginia has any special provisions for inherited installment obligations. Some states have different rules for inherited vs. original installment sales, and a few even provide partial basis adjustments in certain circumstances, though this is rare. From a practical standpoint, since you're the executor and dealing with monthly payments, consider setting up a dedicated estate account just for these transactions going forward. It makes the accounting much cleaner and gives you better documentation if the IRS ever questions the distributions. Have you considered whether it might make sense to accelerate the remaining payments or sell the note entirely? Sometimes the administrative burden and ongoing tax complexity of installment reporting makes it worth exploring other options, especially if the security interest gives you leverage with the buyer. The multi-state complexity alone probably justifies getting professional help, but don't let anyone tell you this is impossible to sort out - it's just a matter of getting the right guidance and documentation in place.

Something important that nobody has mentioned yet - you need to make sure you're still explicitly electing Section 179 on your Form 4562 even though the deduction is completely phased out this year. If you don't make the election, you can't carry forward the disallowed amount!

This is such a helpful discussion! I'm dealing with a similar situation where we purchased $3.2 million in equipment this year and got completely phased out of Section 179. Reading through everyone's responses, I think I need to seriously consider the bonus depreciation route that Natalie mentioned instead of carrying forward the Section 179. Quick question for the group - if I'm understanding correctly, with bonus depreciation at 80% for 2024, I could potentially deduct $2.56 million this year ($3.2M × 80%) versus waiting to use a Section 179 carryforward in future years when bonus depreciation will be lower? That seems like it could be significantly more advantageous, especially since bonus depreciation drops to 60% next year. Has anyone done the math comparison between taking bonus depreciation now versus Section 179 carryforward for large equipment purchases?