Has anyone ever had an IRS examination that focused specifically on QSST basis calculations? I'm worried about how much documentation I need to maintain for this type of situation. Been keeping spreadsheets year by year but wonder if that's sufficient.

I've been following this discussion and wanted to share some additional guidance on the documentation piece that @Mateo Gonzalez brought up. Beyond the annual basis worksheets, I'd recommend maintaining: 1. Copies of all S corp K-1s issued during the QSST period 2. Bank statements showing actual distribution flows (whether to trust or beneficiary) 3. Any correspondence with the S corp regarding distribution timing/amounts 4. Documentation of the original QSST election filing One thing I haven't seen mentioned yet is the potential Section 1374 built-in gains tax implications if this was a C corp that converted to S status. While this typically doesn't apply to QSSTs, it's worth checking the S corp's recognition period status. Also, for the related party analysis, don't forget to consider the constructive ownership rules under Section 267(c). The attribution between the trust, trustee, and beneficiary can get complex, especially when family members are involved as both trustees and buyers. The consensus here about adjusting the trust's basis for all pass-through items is absolutely correct, but make sure you're also considering any Section 754 elections if the S corp has partnership interests or other pass-through entities.

Has anyone here actually used priortax.com specifically? I'm in a similar situation with unfiled 2016 taxes and wondering if it's worth trying.

Just want to add a reality check here - while you're right to file that 2015 return, don't panic too much about the IRS "coming looking for you." If you were due a refund that year, there are literally no penalties for filing late (you just lose the refund after 3 years, which has already happened). If you owed money, yes there will be penalties and interest, but the IRS is usually pretty reasonable about setting up payment plans. The failure-to-file penalty stops accumulating once you actually file, so getting that return in is definitely the right move. For what it's worth, I've used both professional tax preparers and DIY methods for old returns. If your 2015 situation was relatively simple (just W-2s, maybe some basic deductions), the manual route with IRS forms might be cheaper than you think. But if you had complicated stuff going on during that divorce year, spending the money on professional help could save you headaches and potentially money in the long run.

Community wisdom on WMR updates: • Most updates happen overnight (3-4 AM Eastern) • Saturday mornings often show the most changes • Checking multiple times per day won't help • Transcripts update before WMR about 80% of the time • Status bars disappearing can actually be a good sign • Tax Topic 152 usually means normal processing Hope this helps! Anyone have other tips?

As someone who's been through this frustrating waiting game multiple times, I feel your pain about needing that refund for bills. One thing that helped me manage the anxiety was setting up direct deposit if you haven't already - it can shave off a few days compared to paper checks. Also, while everyone's mentioning the overnight updates (which is true), I've noticed that if there's going to be a status change, it usually happens between Wednesday night and Saturday morning. The worst part is that "accepted" status can last anywhere from a few days to several weeks depending on your return complexity. Hang in there - two weeks is still within normal processing times, especially during peak season.

One thing nobody mentioned - depending on the state where the property is located, you might want to look into whether there's a state inheritance tax too. The federal step-up basis is great for avoiding federal capital gains, but some states have their own inheritance or estate taxes that work differently.

Has anyone used one of those online home value estimators instead of paying for a formal appraisal? I'm wondering if the IRS would accept Zillow or Redfin estimates as proof of FMV for establishing stepped-up basis?

The IRS is so behind this year its not even funny anymore. They need to get it together fr

Looking at your transcript, the 570/971 combo is pretty standard when the IRS needs to verify credits - especially with that large refund amount. The good news is your account shows no penalties or interest accruing, which means they're not questioning the legitimacy of your return, just doing their due diligence. Based on the timing (971 notice issued May 2nd), you should receive that letter within 7-10 business days explaining exactly what they need. Once you provide any requested documentation or they complete their internal review, the 570 hold gets released and your refund processes. With credits like EIC and CTC, these reviews are routine but can take 6-12 weeks total. Keep checking your transcript weekly for updates - you'll see the 570 disappear first, then hopefully a 846 code with your direct deposit date. Hang in there! 🤞