Did you have to include the full value of the house AND the full value of the note in the estate? Or was it just the house value minus the loan? The whole thing confuses me.

The estate included the house at its fair market value, and the loan was considered a separate asset of the estate (since it was money owed TO the deceased). So yes, both were included separately in the estate valuation. However, in practical terms, this meant the estate had the house (an asset) and the loan (also an asset from the estate's perspective, since it was money owed to my brother). Once everything transferred to me, the loan disappeared because I can't owe myself money. This is different from typical inheritance situations where the estate owes debts to third parties.

Could you explain more about the stepped-up basis part? If I inherit a house worth $500k but with $200k still owed on a loan I provided, what would my new basis be?

Venmo transactions can absolutely be used for business expenses, but your accountant is right to encourage using business cards when possible. The key with Venmo is documentation. Make sure to: 1) Use a business Venmo account separate from personal 2) Download monthly statements 3) Add notes to each transaction with business purpose 4) Take screenshots of the transactions Venmo doesn't automatically create detailed receipts like credit cards do, so you need to be more diligent about documentation.

Appreciate the straightforward answer! Just to confirm, so I should categorize it specifically as "Meals" rather than something more generic like "Supplies" or "Miscellaneous"? And you're confident this won't create any issues for my friend?

Yes, categorize it specifically as "Meals" because that's what it actually was. Using the correct categorization is always better than trying to hide something in a generic category. Remember that meals are still only 50% deductible (that temporary 100% deduction for restaurant meals expired). And I'm absolutely confident this won't create issues for your friend. Their tax obligations are completely separate from your expense categorization. The IRS doesn't have a system that flags "oh, this business claimed a meal from a non-registered business, let's investigate." Your friend needs to report their income regardless of how you categorize your expense.

Do you have any recommendations for tracking business expenses throughout the year? I'm always scrambling at tax time trying to remember what was business vs personal, especially for things like my cell phone bill.

I use QuickBooks Self-Employed which automatically categorizes expenses from my linked accounts and lets me swipe left/right on transactions to mark them as business or personal. Saved me tons of time versus my old spreadsheet method. For mixed-use items like cell phones, I set calendar reminders to check my usage every quarter and document the business percentage. Most tax pros will tell you it's better to track consistently throughout the year than try to estimate everything at tax time. I also take photos of all receipts with the app so I don't have to keep paper copies.

I ran the numbers on this last year. The excise tax is 10%, so on $4,000 that's $400. But if you don't correct it, that excess contribution keeps getting hit with the 10% EVERY YEAR until you fix it. It compounds into a huge problem over time.

Are meal deductions still a thing? I thought the Trump tax changes eliminated those, or reduced them significantly?

Business meals are still deductible, but it's now at 100% (temporarily increased from 50% during the pandemic, and Congress extended it through 2025). The key is that they need to be directly related to your business - like meeting with clients, potential customers, or business associates. You can't just deduct your lunch when you're working alone. The rules have changed several times in recent years, so it's worth double-checking current guidelines when you file. But yes, legitimate business meals are still deductible expenses.

That's only if you itemize deductions though, right? Most self-employed people I know take the standard deduction because it's usually higher unless you have a mortgage with lots of interest.

Thank you for this advice! Do you know what kind of documentation I should prepare before calling about the Fresh Start program? And will they take my upcoming SSDI into account when determining payment amounts?

You'll want to gather documentation of all your current expenses and income. This includes rent/mortgage, utilities, medical expenses, food, transportation, and any other essential costs. For income, include your wife's pay stubs and documentation of your approved SSDI amount. Yes, they will consider your upcoming SSDI as income when determining payment amounts, but they're required to leave you enough for basic living expenses. Be very clear about all your necessary expenses, especially any ongoing medical costs related to your disability. This is where being detailed really helps - if you can show that after essential expenses you have very little left, they have to work with those numbers.

OIC is super hard to get approved tho. I tried twice and got rejected both times even with legit hardships. They want like proof you'll basically never be able to pay the full amount ever.