Does ProSeries work well for remote clients? I'm planning to have about half my business be virtual, with clients uploading documents rather than coming to an office.

ProSeries has excellent remote capabilities. Their client portal allows secure document uploads and digital signature collection. You can also generate custom questionnaires for clients to complete before their appointment, which saves tremendous prep time. The mobile app lets clients take photos of tax documents that are automatically processed and imported into your system. This has been a game-changer for my virtual clients - no more blurry email attachments or incomplete information.

How's their tech support though? Last thing I need is to be stuck on some complicated return with no help available during peak season.

1 That makes sense conceptually, but what about the reverse situation? If a corporation has a §1231 loss that's deferred under §1031, does that also not reduce E&P until the replacement property is disposed of? I'm trying to understand if the principle applies consistently in both directions.

3 Yes, the principle applies consistently in both directions. If there would have been a recognized loss on the relinquished property (which gets deferred under §1031), that loss doesn't reduce E&P at the time of the exchange. This symmetrical treatment makes sense when you think about the purpose of §1031, which is to defer both gains and losses when there's economic continuity through a like-kind exchange. The E&P rules follow this same logic - neither recognizing the gain nor the loss for E&P purposes until there's an actual taxable event that breaks the chain of deferral.

11 For an S corporation that was previously a C corporation, the rules get a bit more complex. The accumulated E&P from the C corporation period stays with the company even after S election. If the S corporation does a §1031 exchange, and the property involved was held during the C corporation period, then any deferred gain would not have increased the C corporation's E&P at that time. When the replacement property is eventually sold, any gain attributable to the period when the company was a C corporation would potentially increase the accumulated E&P. It's super important to maintain good records in these situations because you need to track the portions of any gain attributable to appreciation during the C corp period versus the S corp period.

Thank you for sharing this. Do you know if VITA sites can handle more complicated situations like mine with a decade of unfiled returns and mixed income types? I'm worried they might turn me away because it's too complex.

VITA sites can definitely handle your situation. They're staffed by IRS-certified volunteers who specifically help people with lower incomes navigate tax issues. Many locations have volunteers who specialize in self-employment and 1099 income situations. You're right that some VITA sites might initially seem hesitant about handling 10 years of unfiled returns all at once. What I'd suggest is going in first to get help determining which years you actually need to file for (likely not all 10), and then working on 2-3 years at a time. Most people in your situation find they only need to file 6 years back to get into compliance.

I filed 4 years of back taxes using FreeTaxUSA last year. You have to buy previous year versions separately, but it was WAY cheaper than TurboTax or H&R Block. I think I paid about $15 per year for state filing (federal was free). The downside is you have to print and mail the previous years - can't e-file them. Current year can be e-filed though.

Thanks for the tip on FreeTaxUSA! Did you have to wait for each year to process before filing the next one, or did you send them all at once? I'm worried about penalties accumulating while I'm getting everything organized.

Oh man, I hadn't even thought about state taxes! Do you know what states besides California don't follow the federal QSBS rules? I'm in Pennsylvania if that makes any difference.

Pennsylvania actually does follow the federal QSBS rules, so you should be good on both state and federal taxes if you qualify. States that don't fully conform to federal QSBS rules include California, Alabama, Mississippi, New Jersey, and a few others. Some states partially conform, meaning they might offer a reduced exclusion percentage or have additional state-specific requirements. It's definitely worth checking with a tax professional familiar with your state's specific rules since this can make a huge difference in your total tax bill.

I tried doing this in TurboTax last year and it was super confusing. They do have a section for it but you have to know exactly where to look - it's under investment income, then capital gains, then there's a checkbox about "special conditions" where you can select Section 1202 stock. But honestly, it was really hard to tell if I was doing it right. I ended up hiring a CPA just to be safe since it was a big amount of money.

Thanks for this explanation! This makes perfect sense and might explain the confusion in the tax guidance I was looking at. Maybe they were assuming the land was just being held for investment rather than actively rented out? Since I'm definitely renting it out at market rate (and reporting that income), it seems clear the property taxes should offset that income on Schedule E.

Yep, that's likely the source of confusion. Tax guidance can sometimes lump "vacant land" into the investment category by default, but the actual tax treatment depends on how you're using the property. Since you're generating rental income, you're running a rental activity, and all ordinary and necessary expenses (including property taxes) should offset that income on Schedule E. Just make sure you keep good records showing the rental activity is legitimate and at fair market value. As long as you can document the rental agreement and income, you should be fine putting those property taxes on Schedule E.

Absolutely! That's a perfect example of rental property. You're renting space to the cell companies, so it's a rental activity. All expenses related to that land (property taxes, insurance, maintenance, etc.) should go on Schedule E to offset the rental income. You're likely overpaying your taxes by putting those expenses on Schedule A, especially with the SALT limitations.