Did you have any data migration issues? We have 10+ years of client data in Onesource and I'm worried about losing historical information. Were you able to bring over basis info and carryforwards?

Data migration was our biggest headache. Most basics transferred okay, but partnership basis information had to be manually verified for every partner. We lost some of the historical allocation details and had to rebuild them. Carryforwards like capital losses and charitable contributions were particularly problematic - about 25% had errors we had to fix manually. If you do switch, I highly recommend running parallel systems for a year and comparing outputs before fully committing. Budget extra staff time for data verification during the transition.

I've used both extensively. For partnerships specifically, Lacerte is significantly better - especially for complex allocations and multi-tiered partnerships. The additional cost pays for itself in time savings and reduced errors. ProSeries struggles with more complex 1065s and the data entry flow isn't as intuitive.

That's really helpful to know! Thanks for sharing your real experience. I'll make sure to have solid documentation ready in case we get a similar notice. Did you respond to the notice yourself or have your accountant handle it?

Our accountant drafted the response, but we had to provide all the backup documentation showing these were actually rental payments. The key was having the platform statements that clearly showed these were payments for specific rental properties. Our accountant said the IRS sees this issue frequently with vacation rental partnerships using platforms like Airbnb, VRBO, etc.

Omg that's a really good point I hadn't even considered! We are on accrual basis, and we definitely have December bookings that get paid out in January. Now I'm worried about potential mismatches. How did you handle this in your case?

We included a separate reconciliation schedule that showed: 1) income per 1099s received for the tax year, 2) plus accrued income from prior year paid in current year, 3) minus income accrued in current year but paid in next year, 4) equals income reported on tax return. Basically you want to show the math of how you get from your 1099 amounts to what's on your return. We also noted which specific properties had timing differences. It's a bit more work, but it creates a clear audit trail.

Do you know if the same applies to dividends on a 1099-DIV? I just found one for $18 that I missed from a small investment account I rarely check.

Yes, the same practical considerations apply to small dividend amounts on a 1099-DIV. For $18 in dividends, the tax impact would be minimal, similar to the interest example we've been discussing. The reporting threshold for 1099-DIV is also $10, just like with interest income. While all income is technically taxable, the IRS generally focuses enforcement resources on larger discrepancies. Just make sure to include all your 1099s next year to avoid this worry altogether. Setting a calendar reminder when tax season approaches can help you remember to gather all your forms before filing.

Thanks for that tip! I did use TurboTax so that's good to know. After reading all the advice here, I'm leaning toward not amending for such a small amount. Next year I'll be more careful about checking for all my 1099 forms before filing!

That's a really good point I hadn't considered. My first payment is supposed to be due on May 15th according to what I set up in TurboTax. Should I just go ahead and make that payment to the IRS directly if I still don't have confirmation by then?

Yes, absolutely make that May 15th payment even without official confirmation. You can pay directly through the IRS Direct Pay system on their website - just make sure to select the correct tax year and payment type (installment agreement). This way you're covered no matter what. If your payment plan is already in their system, the payment will be correctly applied to it. If there was some glitch and the plan wasn't properly set up, you've still made a payment toward your tax debt before any serious penalties kick in.

It happened to me once! Turned out TurboTax had a transmission error with that part of my return. I had to call the IRS and set up the payment plan directly with them. They were actually pretty understanding about it and didn't charge me any late fees since I could prove I tried to set it up on time.

This is really helpful advice. Should we get an attorney involved to draft the documents properly? Is there anything specific we should include in the promissory note to make it clear this is a legitimate loan transaction?

Yes, I would definitely recommend having an attorney draft or at least review your documents. The cost of legal help upfront is much less than dealing with IRS issues later. Make sure your promissory note includes all standard loan terms - principal amount, payment schedule, consequences for default, security interest in the property, etc. Even though there's no interest, everything else should look like a standard loan. Also include language acknowledging that both parties understand there may be imputed interest for tax purposes. Having your uncles keep a payment ledger showing receipt of your payments provides additional documentation of the loan's legitimacy.

That's actually a really good point. I went through something similar and was able to deduct the imputed interest against the rental income I was receiving. Definitely helped offset the tax burden on the rental income!