Would the proposal likely include retirement accounts or just taxable investments? I'm nowhere near the wealth threshold, but just curious how comprehensive it would be.

Retirement accounts would almost certainly be excluded from any unrealized gains tax proposal. These accounts already have specific tax treatment - traditional accounts are tax-deferred until withdrawal, while Roth accounts are already post-tax money growing tax-free. The proposals being discussed are primarily targeting accumulated wealth in taxable accounts that currently allows some ultra-wealthy individuals to avoid income taxation by holding appreciating assets indefinitely, borrowing against them for living expenses, and never triggering taxable events through sales.

That's way too simplistic. The IRS absolutely challenges valuations on items worth significant amounts. Try valuing a $1M painting at $2M for a charitable donation and see how that goes. With billions in tax revenue at stake, they'd implement strict appraisal requirements.

That's interesting - I hadn't considered switching to an S corp. Would I lose any benefits by making that change? And would it affect how I handle the two different income streams?

You wouldn't lose the liability protection benefits, but you would lose the ability to retain earnings at the corporate level at the 21% rate. All income would flow through to your personal return regardless of whether you take it out of the business. For handling the two income streams, there's no difference - both producing and consulting still qualify as personal services. You'd still want to maintain clear records separating the different business activities, but the S corp can absolutely handle both streams. The main benefit is avoiding potential double taxation, especially if you need to take most of the income out as compensation anyway.

There's actually an opportunity there depending on your overall income situation. With a C corp PSC, you could potentially recognize those monthly payments as corporate income when received, then time your salary distributions strategically based on your personal tax situation each year. Gives you more flexibility than if you were receiving those payments directly as an individual.

That's a great point I hadn't thought about. I'm definitely interested in knowing if there are smart ways to handle the timing of those monthly payments to optimize my tax situation.

What about component depreciation or cost segregation studies? I've heard those can front-load even more depreciation. Are those worth doing for a small investor with just 1-2 properties, or are they only worthwhile for larger portfolios?

Cost segregation studies absolutely can be worth it even for small investors with 1-2 properties, especially for properties with higher improvement values (like $300K+ in building value). These studies typically identify 20-30% of a building's components that can be depreciated over 5, 7, or 15 years instead of 27.5 years. The sweet spot is usually properties purchased in the last 1-3 years with significant improvement value. The studies themselves typically cost $3,000-$7,000 depending on property size and complexity, but can generate tax savings of $15,000-$50,000 in the first year for many properties. Just make sure you work with a reputable firm that has experience defending their studies in IRS audits if needed.

Yes, you still have to pay depreciation recapture even if you sell at an overall loss. The IRS treats the depreciation recapture as a separate calculation from your capital gain/loss. So you could have a capital loss on the sale but still owe depreciation recapture tax on all the depreciation you claimed (or should have claimed) during ownership. It's one of the nastier surprises in real estate taxation.

What about liens? I heard they can put a lien on your house or property if you don't pay. How long before they do that?

Liens are definitely a possibility, but they typically don't happen immediately. The IRS generally sends multiple notices before filing a tax lien. Usually, you'll receive several billing notices over a period of months. If you've set up an installment agreement and are making your payments on time, the IRS typically won't file a lien. However, if you owe more than $10,000 and don't set up a payment arrangement, a lien becomes much more likely. The timeline varies case by case, but it's usually not something that happens within the first couple months of non-payment.

I completed an Offer in Compromise last year. It's legitimate but NOT easy to get approved. They do a thorough financial analysis of your assets, income, and expenses to determine your "reasonable collection potential." They only accept offers that are equal to or greater than what they think they can collect from you. I owed about $22k and settled for $9k, but I had to prove genuine financial hardship and limited assets. The application process took almost 9 months and required extensive documentation. Those "pennies on the dollar" ads you hear are very misleading.

Can you get these transcripts right away or is there a waiting period after filing?

There's a processing time of about 2-3 weeks after you file before the current year's transcripts become available. Prior years are available immediately. The "account transcript" will update faster than the others and will show your payment, so that's the best one to check first if you're concerned about whether your payment was properly applied.

That "no news is good news" thing is so stressful though! Like, can they not send a simple "yep we got it, you're good" email in 2025?? The government is so behind on technology.