This is a really common issue that catches a lot of people off guard! You're absolutely right to be thorough by cross-checking between different programs - that level of diligence often reveals these kinds of discrepancies that can be costly if missed. From my experience dealing with similar AMT foreign tax credit situations, FreeTaxUSA appears to be handling this correctly. The key principle is that when you're computing AMT, you need to stay within the AMT "universe" for all related calculations. This means your Form 1116 limitation calculations should indeed use your AMT-adjusted income figures rather than your regular taxable income. The reason the IRS instructions aren't more explicit about this is because they assume you understand that AMT creates a parallel tax calculation system. When Form 6251 adjusts your income by adding back certain deductions and making other modifications, those adjusted figures should flow through to all related forms, including the AMT version of Form 1116. A $2,700 difference is significant enough that I'd definitely recommend getting this right rather than just picking the software that gives the bigger refund. If you want additional confirmation, you might consider reaching out to a tax professional who specializes in international tax issues, or even contacting the IRS directly for guidance on your specific situation. The good news is that once you understand how this works, future years become much easier to handle!

This is exactly the kind of thorough tax preparation approach that saves people from costly mistakes! Your situation perfectly illustrates why the AMT system is so confusing - it creates this parallel tax universe that affects multiple forms in ways that aren't always obvious. You're absolutely right to trust FreeTaxUSA's approach here. The AMT version of Form 1116 should indeed use AMT-adjusted figures throughout the calculation. When Form 6251 modifies your taxable income by adding back the standard deduction and making other AMT adjustments, those modified amounts need to flow through to the Form 1116 limitation calculations. Otherwise, you're mixing regular tax and AMT figures, which defeats the purpose of having separate calculations. The $2,700 difference you're seeing is actually not uncommon when AMT kicks in with foreign tax credits. The interaction between these two complex areas of tax law can create significant swings in your final tax liability. One thing to keep in mind for future years - if you're consistently subject to AMT, you might want to consider tax planning strategies to minimize the impact. This could include timing certain deductions or income recognition to optimize both your regular tax and AMT calculations. Don't go with "whichever gives the bigger refund" - that's a recipe for audit trouble. Stick with the software that's calculating it correctly (FreeTaxUSA in this case) and keep detailed documentation of the calculations for your records.

One thing that might help ease your mind: the IRS has specific guidance on this exact situation in Publication 525. Since you paid $700 for shares with a par value of $70, and this was at company formation when fair market value was likely minimal, you've essentially paid above fair market value. This means there's no "bargain element" to report as income. The 83(b) election protects you from future taxation as your shares vest - without it, you'd owe ordinary income tax on each vesting tranche based on the company's value at that time. Since you made the election and paid fair market value upfront, you're in good shape. For your 2024 return, just keep your documentation organized: the 83(b) election filing proof, your $700 payment record, and the stock purchase agreement. Most tax software won't even prompt you for this information since there's no taxable event to report. The real benefit comes later when you sell - everything above your $700 basis will be capital gains instead of ordinary income.

Adding to the great advice already given - one practical tip that saved me headaches later: create a simple spreadsheet tracking all your equity-related transactions and dates. Include your initial $700 payment, the 83(b) filing date, vesting schedule milestones, and any future equity events. This becomes invaluable if you ever get audited or need to calculate basis for tax purposes down the road. I wish I had done this from day one instead of scrambling to reconstruct everything years later when we had our exit. Also, regarding your specific situation - since you paid above par value at formation, you're in the best possible position tax-wise. The 83(b) election combined with paying fair market value means you've essentially "pre-paid" any tax obligations on these shares. Future appreciation will be capital gains when you sell, which is exactly what you want as a founder.

Great discussion here! As someone who recently went through a similar family property transfer, I'd add that timing is crucial for your decision. One factor to consider is the current real estate market - if you expect significant appreciation in the coming years, transferring ownership now (through gifting or discounted sales) could be very beneficial since all future appreciation would occur outside your parents' estate and potentially at lower tax brackets for the kids. However, if your parents are in their 70s or 80s, the step-up in basis strategy Gabriel mentioned could be more valuable. You'd need to run the numbers comparing: (1) current capital gains tax on a sale now, (2) gift tax implications of transfers, and (3) potential estate tax vs. step-up benefits if held until death. Also worth noting - if you go the LP interest transfer route, make sure you understand the implications of being general vs. limited partners. The liability exposure and management responsibilities are quite different, which could affect your family dynamics around decision-making for the property. Have you considered what happens if some siblings want to sell their interest while others want to hold? The LP operating agreement should address buyout provisions and transfer restrictions to avoid future conflicts.

From a liability perspective, as limited partners you'd have much better protection - your liability would generally be limited to your investment in the partnership. However, LLCs typically offer even stronger liability protection for all members, which is why many families are moving away from LP structures for real estate holdings. Regarding professional help, I'd strongly recommend finding a tax attorney or CPA who specializes in family wealth transfer strategies. This type of planning really benefits from someone who can model different scenarios and their long-term implications. Look for someone with experience in both estate planning and real estate taxation - the intersection of these areas requires specialized knowledge. One additional consideration I haven't seen mentioned: if your family decides to hold the property long-term, think about succession planning for management responsibilities. What happens when your parents can no longer actively manage the property? Having clear governance structures in place now (whether LP or LLC) can prevent family conflicts later when someone needs to make day-to-day decisions about maintenance, tenant issues, major capital improvements, etc. The fact that you're thinking through these issues now while everyone is healthy and communicating well puts your family in a much better position than many families who wait until there's a crisis to address these questions.

As someone who works with tax issues regularly, I want to add a few practical points that might help newer traders navigate wash sales more effectively. First, regarding @Teresa Boyd's excellent point about cash flow - this is absolutely critical. I've seen many traders get blindsided by unexpected tax bills because they assumed their December losses would offset their gains, only to discover those losses were disallowed due to wash sales. One strategy that can help: if you're planning year-end tax loss harvesting, consider doing it earlier in December (or even November) rather than waiting until the last minute. This gives you more time to ensure you don't accidentally repurchase the same securities and create wash sales. Also, for those asking about tracking across multiple brokers - your brokers are required to report wash sales on your 1099-B, but they can only track what they can see within their own systems. If you have accounts at multiple firms, you're responsible for identifying and adjusting for wash sales that occur across those accounts. The IRS doesn't get a consolidated view either, so it's really up to you (or your tax software/professional) to catch these cross-broker wash sales. This is why keeping detailed records and using tools that can aggregate data from multiple sources becomes so important if you're an active trader. One last tip: if you're unsure about complex wash sale situations, don't hesitate to consult a tax professional who specializes in trader taxes. The cost of getting it wrong can far exceed the cost of professional advice.

@Giovanni Colombo great question about finding qualified tax professionals! Here are a few ways to find tax preparers who actually understand active trading: 1. Look for CPAs or EAs (Enrolled Agents) who specifically advertise "trader tax services" or "active investor tax preparation." Many will mention this specialization on their websites. 2. Check with your brokerage - many major firms like Fidelity, Schwab, and TD Ameritrade maintain referral lists of tax professionals familiar with trading complexities. 3. The American Institute of CPAs (AICPA) has a "Find a CPA" tool where you can filter by specialties including investment taxation. 4. Consider looking into firms that specialize in trader taxes - there are several national firms that work exclusively with active traders and can handle multi-broker wash sale situations remotely. A good trader-focused tax professional should immediately understand concepts like cross-account wash sales, mark-to-market elections, and the IRA wash sale rule @Ingrid Larsson mentioned. If they seem unfamiliar with these topics during your initial consultation, keep looking. You're absolutely right that your regular tax preparer would likely be out of their depth. Trading taxes are a specialized area, and the complexity only increases with multiple accounts and active trading strategies. The investment in proper professional help usually pays for itself by avoiding costly mistakes.

This has been an incredibly informative thread! I'm in a similar situation with twins starting daycare next year, and this discussion has really helped clarify the FSA vs. tax credit strategy. One thing I wanted to add that might help others - when calculating your potential tax savings, don't forget to factor in state income taxes if you live in a state that has them. The FSA contributions reduce your state taxable income too, which can add another 4-6% in savings depending on your state's tax rate. Also, for those worried about the FSA "use it or lose it" rule, many employers now offer a $610 carryover option (increased from $550 for 2025) or a grace period through March 15th of the following year. This gives you a little buffer if your actual expenses end up being slightly less than projected. @Wesley - given your situation with $5,800 in expected costs, the FSA + credit combination definitely seems optimal. Just make sure to confirm your spouse's part-time income will support the full benefit amount as others mentioned. The math really does work out better than using either option alone at your income level. Thanks to everyone who shared their experiences with documentation and record-keeping too - those practical tips are just as valuable as the tax strategy advice!

Great question about the timing and tax software handling! From my experience, the timing of payments doesn't matter as much as how you allocate them for tax purposes. You can pay your preschool monthly throughout the year and then decide at tax time which expenses to claim through which benefit. For documentation, I create a simple spreadsheet tracking all childcare payments with columns for date, amount, provider, and then two additional columns marked "FSA" and "Tax Credit" where I allocate each expense. This makes it crystal clear which dollars are going toward which benefit and ensures no overlap. Regarding tax software - most programs like TurboTax will walk you through both the FSA reporting and the dependent care credit, but YOU need to make sure you're not double-counting. The software won't automatically catch if you're claiming the same $1,000 expense in both places. It relies on you to input accurate numbers for each section. One tip: I always total up my FSA reimbursements first (your employer should provide a summary), then subtract that amount from my total childcare expenses before entering anything into the dependent care credit section. This prevents any accidental overlap. @Wesley - this systematic approach will serve you well, especially with $5,800 in expenses to track across two different tax benefits. The key is being methodical about the allocation from day one.