This thread has been incredibly helpful! I've been wrestling with this exact issue for a client's C Corp acquisition and was second-guessing my approach. Based on everyone's input here, I'm now confident that keeping the full balance sheet intact with a detailed footnote is the right approach for the C Corp situation. I was initially tempted to zero it out thinking it would be "cleaner" since the entity was being absorbed, but I can see now that would have been incorrect. For those who mentioned getting IRS confirmation directly - that's really smart. I might try the Claimyr approach for a different complex issue I'm dealing with. The idea of actually talking to someone who knows corporate tax rather than spending hours researching conflicting guidance is really appealing. One thing I'd add based on my experience: make sure your footnote disclosure is really detailed about the acquisition mechanics. I've found that vague language like "entity was acquired" isn't sufficient. The IRS wants to understand the specific transaction structure, whether it was a stock purchase, asset purchase, merger, etc., and how that affects the tax treatment. The more specific you can be about the transaction type and timing, the better. Thanks everyone for sharing your experiences - this is exactly the kind of practical guidance that's hard to find in the official publications!

Great discussion everyone! I just want to add a practical tip that's helped me with both scenarios mentioned here. For C Corp acquisitions, beyond keeping the balance sheet intact with detailed footnotes, I've found it helpful to coordinate with the acquiring company's tax team before filing. They often have specific information about how they're treating the acquisition for consolidated return purposes that can inform your footnote language. This coordination has prevented issues where our final return disclosure didn't align with their initial consolidated return treatment. For LLC technical terminations, one thing I learned from experience is to be extra careful about the timing of when you file the final return versus when the new entity files its initial return. I had a case where we filed the terminated LLC's final return (with zeroed balance sheet) before the new partnership had filed its initial return showing the carryover assets. This created a temporary "gap" in the IRS system where assets appeared to disappear, which triggered an automated inquiry. Now I try to coordinate the filing timing or at least include language in the footnote explaining when the successor entity will be filing its initial return. Small detail, but it can save you from unnecessary correspondence later. The key takeaway from all these responses seems to be: proper disclosure through detailed footnotes is crucial, and when in doubt, provide more detail rather than less. The IRS appreciates transparency about complex transactions.

This thread has been a real eye-opener for me! I've been relying on the online account for the past two years thinking it was comprehensive, and now I'm realizing I may have been flying blind. The fact that critical notices like CP2000s and audit letters don't show up online seems like a major design flaw - or at least something that should be prominently disclosed when you set up your account. I'm definitely going to follow everyone's advice about requesting account transcripts and filing Form 8822. One question I have: if I find transcript codes indicating notices were sent that I never received, what's the best way to request copies of those specific letters? Can the IRS resend them, or do I need to call and ask for duplicates? This whole situation makes me appreciate how helpful this community is - the IRS website certainly doesn't explain these limitations clearly!

As a new community member, I'm finding this discussion incredibly valuable! I had been wondering about this exact issue after noticing discrepancies between what I received in the mail versus what showed up in my online account. Reading everyone's experiences has made me realize I need to be much more systematic about tracking IRS correspondence. The advice about requesting account transcripts and looking for 971 codes is particularly helpful - I had no idea those codes existed or what they meant. I'm also grateful for the clarification about Form 8822, as I recently moved and only updated my address with the post office. It sounds like I need to file that form separately with the IRS to ensure proper mail delivery. This community's knowledge-sharing really highlights how the IRS could do a better job explaining these limitations upfront. Thank you all for taking the time to share your experiences and practical solutions!

Don't forget about state tax returns! Depending on your state, you may need to file a state tax return for the trust as well. Some states have different filing thresholds than the federal $600 income requirement. Also, if the property has appreciated significantly since your mother purchased it, the stepped-up basis provision is HUGELY beneficial. The basis becomes the fair market value at date of death, which could save tens of thousands in capital gains taxes.

I'm so sorry for your loss, Lucy. Being an executor for the first time is overwhelming, especially when dealing with trust taxation. A few additional points that might help you: 1. **Get organized early** - Start gathering all necessary documents now: the trust document, your mother's death certificate, property appraisals, and any financial statements. You'll need these for multiple filings. 2. **Consider quarterly estimated taxes** - If the house sale generates significant capital gains and you're distributing the proceeds to yourself, you might need to make estimated tax payments to avoid underpayment penalties. 3. **Document everything** - Keep detailed records of all expenses related to maintaining and selling the property. Many of these costs can be deducted against the gain, including realtor commissions, staging costs, repairs, and legal fees. 4. **Timeline planning** - Since you're selling in 2023, you have until April 15, 2024 to file the trust's Form 1041. However, if you expect a large tax liability, consider making quarterly payments throughout 2023. The stepped-up basis is indeed a huge advantage here - your $30,000 potential gain is much better than what it could have been if calculated from your mother's original purchase price. Make sure to get a formal appraisal dated as close to her date of death as possible to support that basis.

One important thing to watch for with multiple W2s - Social Security tax. Each employer withholds 6.2% of your wages for Social Security up to the annual wage limit ($147,000 for 2022). If your combined income from both jobs exceeded that limit, you may have overpaid Social Security tax that you can get back when filing.

Just wantd to mention, when I had 2 w2s I just added the box 1 income from both, added the fed witholding together, and the state witholding together. Enter those on your 1040 and ur good to go! No need to complicate it imo.

This thread has been incredibly helpful! I work for a state agency and have been wrestling with this same question about my pension contributions. After reading through everyone's experiences, I think I need to take a closer look at my W-2 to see how my contributions are being handled. One thing I'm curious about - for those of you who discovered your pension contributions were pre-tax, did you notice any difference in how state taxes were handled versus federal taxes? I'm in a state with income tax, and I'm wondering if the treatment might be different at the state level. Also, has anyone dealt with situations where you move between states during your career? I'm wondering how that might affect the tax treatment of accumulated pension benefits. Thanks to everyone who shared their experiences with the various tools and services - it's clear there are good resources out there when you need help navigating these complex tax situations!

This is exactly the kind of confusion I had when I first started working for my state agency! After going through this myself, I can confirm what others have said - those mandatory pension contributions are almost certainly already being handled as pre-tax deductions. The easiest way to verify this is to look at your final paystub for the year and add up all your gross pay, then compare that to Box 1 on your W-2. If Box 1 is lower by roughly the amount of your annual pension contributions (plus health insurance and other pre-tax deductions), then you're already getting the tax benefit automatically. I made the mistake early on of thinking I needed to track these contributions for tax purposes, but it turns out the payroll system handles it all behind the scenes. You're essentially getting the same tax treatment as someone maxing out a traditional IRA or 401(k), just through a different mechanism. The key difference is that with voluntary retirement contributions, you see them as deductions on your tax return, but with mandatory pension contributions, the tax benefit happens before your W-2 is even generated. One tip: keep your year-end paystub that shows your total pension contributions for the year. While you won't deduct it, it's good to have for your records and helps you understand how much you're actually saving for retirement through the pension system.