Thanks for bringing this up! Do you know if there's any way to find out about Spain's exit tax policies? My broker hasn't mentioned anything about this, but they've been pretty unhelpful overall. Also, with the transfer-in-kind option, would that avoid triggering US taxes, or would the IRS still consider that a taxable event even though I'm not technically selling?

Your best source would be the Spanish tax authority website or calling them directly. Sometimes these exit taxes only apply if you've been in the country for a certain number of years or have investments over a specific threshold. In Portugal, it only applied to investments I'd held for more than 5 years and only on the appreciation portion. For the transfer-in-kind, if the securities are identical before and after the transfer (same ISIN number), the US generally doesn't consider it a taxable event. You're simply moving the same investment from one broker to another. However, this only works if the exact same fund is available on both platforms. Most European funds don't have US equivalents with identical ISINs, which is where the problem lies.

Is there any way around the PFIC classification? I have some Swiss funds I really don't want to sell but don't want the tax headache either.

Can you explain more about how to calculate which is better? I paid about $12,000 in tuition for my master's degree in 2019, and I'm trying to figure out if I should amend.

Sure! The calculation depends on your tax situation and what education expenses you had. For a master's degree, you wouldn't qualify for the American Opportunity Credit (it's only for undergrad), so you're choosing between the Lifetime Learning Credit and the tuition deduction. With $12,000 in qualified expenses, you could claim a Lifetime Learning Credit of 20% of that amount, up to the maximum of $2,000. So your LLC would likely be the full $2,000. For the tuition deduction, you could deduct up to $4,000, but the tax savings depend on your tax bracket. If you're in the 22% bracket, that's a savings of $880. In the 24% bracket, it's $960. So in your specific case with graduate school expenses, the Lifetime Learning Credit would likely be more beneficial than the tuition deduction.

You need to file separate 1040-X forms for each tax year. I did this last month for both 2018 and 2019. Make sure to mail them in separate envelopes too, as they go to different processing centers depending on the tax year.

Does this apply to FreeTaxUSA too? I switched from TurboTax this year to save money, but I'm worried the cheaper software might not handle these details correctly.

Yes, FreeTaxUSA handles Schedule B the same way. I actually switched to FreeTaxUSA two years ago after using TurboTax for over a decade. Their interface for entering 1099-DIV information is straightforward - you just enter "Vanguard Brokerage Account" as the payer name and the total amount from Box 1a. The software will automatically generate Schedule B if you're over the $1,500 threshold. FreeTaxUSA is actually quite robust for most tax situations, especially for investments. The only real difference I've noticed is that the interface is a bit more streamlined, but all the functionality is there.

That makes sense! My sister has about 8 different funds, so I can see how that would get unwieldy. Sounds like this is standard practice and not something unique to Vanguard. Appreciate everyone's helpful responses - this has been really educational for both of us!

Exactly! And if your sister has multiple brokerage accounts, she would list each brokerage separately on Schedule B. For example, if she has Vanguard and Fidelity, she would have two entries - one for each brokerage with their respective totals from Box 1a of each 1099-DIV. The IRS matches these totals with what each institution reports, not the individual holdings within each account.

That's a great point I hadn't considered. I acquired the shares in three different grants over about 2 years, with different purchase prices. Would I need to specifically tell my broker which lots to sell, or is that something I can handle when I file my taxes?

You need to specify which lots you want to sell at the time of the sale - you can't decide later when filing taxes. Most online brokerages have this option during the trade execution process, usually called "tax lot selection" or something similar. If your broker's online platform doesn't make this obvious, call their customer service before placing the trade. Once the trade settles, you typically can't change which lots were sold, so it's important to get this right the first time. This kind of specific lot identification can make a substantial difference in your tax situation.

This is good advice. You can offset up to $3k of ordinary income per year with capital losses beyond what you use to offset gains. So if OP doesn't need to offset all $87k in gains this year, they could realize some losses now and carry the rest forward.

Thanks for this suggestion! I didn't even know I could request a transcript. Will this show pending actions on my account too, like if they're actually processing a lien? And how far back does it go - will it show the original CP2000 issue from 2017?

Yes, the account transcript will show pretty much everything related to that tax year, including the CP2000 adjustment, any penalties or interest assessed, and your payment. It should also show any collection actions being considered or initiated. The transcript goes back the full timeline for that specific tax year, so your 2017 transcript will show everything from when you first filed that return up through current actions. When you request it, make sure you're getting the "account transcript" specifically (not just the "tax return transcript") and for tax year 2017. This is the most comprehensive record of all transactions and will be your best evidence if you need to dispute anything.

I did this last year for a payment issue. You need to schedule an appointment first (can't just walk in) by calling 844-545-5640. They were able to pull up my account and confirm my payment had been received. Took about 2 weeks to get an appointment but the actual visit was only about 30 minutes.

Thanks for the tip about needing an appointment. Did they actually resolve your issue during the visit or did you still have to wait for processing? I'll try calling that number tomorrow to schedule something.