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Quick question - what exactly counts as "income" for US tax purposes when living abroad? I have a family member who mostly received gifts from local family while living in another country. Would that even count for filing requirements?
Gifts generally aren't considered taxable income to the recipient for US tax purposes, regardless of whether you're in the US or abroad. So if your family member was just receiving financial support from relatives, that likely wouldn't trigger a filing requirement. However, if they had any actual employment, investment income, pensions, etc., those would potentially be reportable.
This is such a helpful thread! I'm dealing with a similar situation with my sister who lived in Australia for 12 years and never filed. Reading about the Streamlined Filing Compliance Procedures gives me hope that there's a reasonable path forward. One thing I'd add for the original poster - when your brother does start working again, make sure he keeps excellent records of his foreign residence period. Having documentation showing he was genuinely living abroad (not just traveling) can be really important for qualifying for programs like the Streamlined procedures or demonstrating that any non-filing was truly non-willful. Also, regarding the health insurance question - I work in benefits administration and can confirm that marketplace enrollment by itself doesn't trigger IRS investigations. The systems are more focused on verifying current eligibility than digging into historical filing patterns.
Quick question - does anyone know if the 30% solar credit applies to the entire installation cost for rental properties? I was told by a solar company that for investment properties there are different rules about what expenses qualify compared to primary residences.
I installed solar on two of my rentals last year. For rental properties, you can claim the 30% credit on the total cost, but you also have to reduce your basis in the property by half the amount of the credit taken. This affects your depreciation going forward. Also, make sure the solar equipment is directly supplying energy to your rental units. If you have a situation where the panels are on one property but supplying energy to multiple properties, there are special allocation rules.
Thanks for the clarification on the basis reduction - that makes sense. My panels will only supply energy to the single rental property where they're installed, so at least I don't have to worry about the allocation rules. I think I'll go ahead with the installation knowing I can apply the credit to my overall tax liability. Just need to remember to properly adjust my depreciation schedule going forward.
Just to add one more important point that might be helpful - make sure you're aware of the timing rules for claiming the solar credit on rental properties. The credit is based on when the solar system is "placed in service," which is typically when it's installed and ready to generate electricity, not when you paid for it. If you installed the panels late in the tax year, you might want to consider whether it makes sense to claim the full credit this year or potentially spread some costs across tax years if you have installation work spanning multiple years. Also, keep detailed records of all installation costs, permits, and the date the system became operational - the IRS can be particular about documentation for energy credits on investment properties. Your situation with $16,000 in W-2 tax liability gives you plenty of room to absorb the full $10,250 credit, so you should be able to use it all in the current tax year rather than having to carry any forward.
Friendly reminder to double check that your direct deposit info is correct! I thought mine was stuck but turns out I typed one number wrong in my account # š¤¦āāļø
Filed mine on 2/2 and still waiting too! Called last week and they said they're processing returns in the order received but with "additional security measures" this year. The rep couldn't give me a specific timeline but said to check back in 2-3 weeks if still no update. Hang in there! š¤
Thanks for sharing that info! "Additional security measures" - that probably explains the delays. At least we know they're working on them in order. Really hoping we both see some movement soon! š¤
Have you tried these alternative approaches? ⢠Contact Taxpayer Advocate Service (they can help when normal channels fail) ⢠Request your Account Transcript online instead of waiting for return processing ⢠Visit local IRS office in person (appointment required) ⢠Check if your state has a tax agency that can confirm receipt of federal return Do any of these sound feasible with your schedule? Many parents I know have had success with the TAS route when dealing with paper returns.
I'm dealing with the exact same frustrating situation! Filed my paper return on February 15th and it's radio silence from the IRS. Like you, I'm juggling work and family obligations and can't spend entire days trying to get through to them on the phone. It's incredibly stressful not knowing if they even received it or if there's an issue. I've been checking "Where's My Refund" obsessively but it still shows no information available. Reading through these responses gives me some hope that others have eventually gotten through - might have to try some of these suggested approaches since the standard waiting game clearly isn't working for any of us paper filers this year.
Oliver Zimmermann
From personal experience with a similar situation, don't just call the general IRS number - specifically ask for the Revenue Officer assigned to your case (should be listed on the notice). They have more authority to help than the regular phone representatives. Also, consider applying for an Installment Agreement while you sort this out, even if you plan to dispute the amount. This can prevent immediate levy actions while you gather documentation to prove the correct amount. Form 9465 is what you'd use for that. Being proactive is key - even a small payment shows good faith and may help with penalty abatement later.
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Giovanni Mancini
Dylan, I'm sorry you're going through this stress! The CP504 is definitely serious, but the good news is that you still have time to resolve this before any actual levy action occurs. Based on your description, it sounds like the IRS is treating you as if you received all $113K in business income for the entire year ($40K + $73K), when you actually only participated for the first quarter and then sold your share. This is a common issue when business partnerships aren't properly documented with the IRS. Here's what I'd recommend as your immediate action plan: 1. **Call the IRS tomorrow** using the number on your CP504 notice and request a temporary hold on collection activities while you gather documentation 2. **Gather key documents**: Your sale agreement from March 2017, bank statements showing the $9K you received, any profit/loss statements from those first 3 months, and documentation of when you stopped being involved in the business 3. **File an amended return (Form 1040X)** for 2017 showing your correct income - likely just the portion you earned in those first few months plus the $9K sale proceeds 4. **Consider getting help** - this involves business income allocation and partnership tax issues that can be tricky to navigate alone The fact that you were only making $3-5K from your job and the business was short-term makes it very unlikely you'd owe $24K. Stay calm, act quickly, and document everything!
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