Quick clarification question - I'm a US citizen working in Japan and visit home for about 3 weeks every Christmas. For Form 2555, do I need to prorate my foreign housing exclusion for those days I'm in the US, or can I claim the full amount?

Great question! As someone who's been helping expats with Form 2555 for years, I can confirm that you should use 365 days as your qualifying period. Since you've been a bona fide resident of Spain since 2012, your 22-day visit to the US for your mom's surgery doesn't disrupt that status. The key factors the IRS looks at for bona fide residence are: 1) Your permanent home is in Spain, 2) You have no definite plans to return permanently to the US, and 3) Your temporary visit had a clear purpose (family emergency) with intent to return to Spain. You're correctly reporting those US days in Part II Question 14 - that's just for documentation. But for your qualifying period calculation, you remain a bona fide resident for all 365 days of 2024. This means you can exclude the full amount of your foreign earned income (up to the annual limit), regardless of those 22 days spent in the US. The IRS Publication 54 specifically addresses this scenario. After 12+ years of residence in Spain, brief visits for family emergencies absolutely don't change your bona fide residence status. You're good to go with 365 days!

Curious about something no one's mentioned - does the business structure matter here? Would an LLC vs S-Corp vs Sole Prop change how this works? My plumbing company is set up as an S-Corp and I'm wondering if that changes the equation.

As someone who went through a similar situation with my landscaping business, I'd strongly recommend your client reconsider the G Wagon choice. I initially wanted a high-end SUV for "client meetings" but my accountant walked me through the reality of audit risks. The IRS has specific precedents for luxury vehicle challenges. In cases like Cadillac vs. Commissioner and similar rulings, they've consistently ruled against taxpayers claiming 100% business use on vehicles that are clearly designed for personal luxury rather than business necessity. For construction work specifically, your client would need to demonstrate why a G Wagon's capabilities are essential versus a standard work truck. Things like ground clearance, towing capacity, and job site access can be legitimate business justifications, but a G Wagon's luxury features (premium interior, advanced entertainment systems, etc.) work against the business necessity argument. I ended up with a crew cab pickup truck with a tool box - got the same tax benefits with zero questions from the IRS. Sometimes the boring choice is the smart choice when it comes to tax planning.

One thing nobody mentioned - if she's generating income from the parking lot, she needs to report that on Schedule E as rental income. But if she's actively managing it (like a parking business with attendants, etc.), it might need to go on Schedule C and be subject to self-employment tax. Big difference tax-wise!

Great advice everyone! Just to add one more consideration - make sure your sister keeps detailed records of any expenses related to the parking lot (maintenance, repairs, insurance, etc.) as these can be deducted against the rental income. Also, if she decides to make any improvements like adding lighting, security cameras, or resurfacing, those improvements would also be depreciable assets separate from the original paving. Since she's new to this, I'd really recommend consulting with a tax professional who specializes in real estate to make sure she's maximizing all available deductions and handling the depreciation correctly. The rules can get complex, especially with inherited property, and getting it right from the start will save headaches later during audits or when she eventually sells.

Don't forget to look into cost segregation studies for your rental properties! Even with income limitations, accelerated depreciation on components of your property can still benefit you long-term by increasing those suspended losses that you'll eventually get to use.

The passive activity loss rules can be really frustrating when your income crosses that threshold! One thing that hasn't been mentioned yet is the potential for material participation elections. If you can document significant involvement in your rental activities (not just the real estate professional test, but actual material participation), you might be able to treat some rental income as non-passive. Also, don't overlook the benefits of proper entity structuring. Some rental property owners benefit from holding properties in LLCs or partnerships where the income characterization might be different, though this requires careful planning with a tax professional. The key is to keep meticulous records of everything - time spent, expenses, improvements, etc. Even if you can't use the losses now, they're building up valuable tax benefits for the future. I've seen people with suspended losses from years ago get massive tax savings when they eventually sell their properties or their income situation changes.

I successfully handled my husband's final return last year after weeks of frustration. The key was persistence and documentation. I created a dedicated folder with copies of EVERYTHING - the original return, death certificate, executor papers, and most importantly, a detailed log of all communications with the IRS including dates, times, and employee IDs when possible. After no movement for 10 weeks, I sent a follow-up letter referencing the certified mail tracking number of the original submission. Magically, the refund was processed two weeks later. Document everything and be methodical - it eventually pays off.

I'm sorry for your loss and completely understand the stress of navigating IRS procedures during such a difficult time. You're actually handling this correctly - the rejection and requirement for paper filing with death certificate is standard protocol for deceased taxpayer returns. The fact that WMR isn't showing anything yet is completely normal and expected. Paper returns for deceased taxpayers go through a specialized processing unit and can take 12-16 weeks, sometimes longer given current IRS backlogs. Since you filed in mid-March and it's only been a few weeks since delivery, you're still well within normal processing timeframes. I'd suggest waiting until at least the 12-week mark before following up. Keep all your documentation organized (certified mail receipts, copies of everything sent) as others have mentioned - you're doing everything right so far.