I think we're overcomplicating this. The rule is simple - if it's personal, it's not a corporate expense, period. It doesn't matter if you call it non-deductible on M-1, it's still a distribution to the shareholder. The only legitimate non-deductible expenses are things that benefit the corporation but aren't deductible under tax law (life insurance premiums, certain penalties, 50% of meals, political contributions, etc). I tell my clients there are only 3 ways to get money out of a C-corp: 1. Salary for services actually rendered 2. Loans (with proper documentation) 3. Dividends Anything else is just dividends in disguise, and the IRS isn't stupid.

This is exactly the kind of situation that drives me crazy as a tax professional. You're absolutely right to push back on the previous accountant's approach. The fundamental test isn't whether an expense is deductible - it's whether the expense has ANY legitimate business purpose. Personal expenses like family vacations and tuition have zero business purpose and should never touch the corporate books, even as M-1 adjustments. I've seen too many practitioners use the M-1 approach as a lazy way to avoid difficult conversations with clients. But you're setting up both yourself and the client for problems down the road. The IRS has gotten much more aggressive about constructive dividend audits, especially with closely-held C-corps. My advice: bite the bullet now and clean this up. Reclassify the personal expenses as dividends (or loans if there's proper documentation and repayment ability). Yes, it'll create some additional tax liability, but it's better than dealing with an IRS audit that could go back multiple years with penalties and interest. The client may not like it initially, but they'll thank you when they're not facing a massive IRS bill later.

Has anyone used TurboTax for calculating how bonuses affect your taxes? I'm trying to figure out if I should upgrade to their premium version this year since I got a significant bonus.

One thing that might help with your planning - if you're concerned about underwithholding on your bonus, you can submit a new W-4 to your employer to increase your withholding for the rest of the year. This way you can avoid owing a large amount at tax time without having to set aside cash separately. You can use the IRS withholding calculator on their website to figure out if you need to adjust. It takes into account your bonus and helps determine if your current withholding will cover your total tax liability. If not, you can increase your withholding on future paychecks to make up the difference. Another option is to make estimated quarterly tax payments if you prefer to handle the extra tax obligation that way rather than adjusting payroll withholding.

I've been dealing with a similar situation and wanted to share what I learned from my CPA. The most important thing is to distinguish between a true "worthless security" and a security that was acquired at a minimal value. Based on your description, it sounds like your First Republic shares likely went through the JPMorgan acquisition process rather than becoming truly worthless. Here's what you should do: 1. **Get the facts first**: Call your broker and request the "Corporate Action Notice" for First Republic Bank from May 2023. This will tell you exactly what happened - whether you received cash, JPMorgan shares, or nothing at all. 2. **If you received ANY compensation** (even pennies): This is a regular sale transaction. Use the actual acquisition date, your original cost basis, and whatever you received as proceeds on Schedule D. 3. **For the limit order problem**: Since your shares show $4 value, set your limit price at or below the current bid price (maybe $0.01 per share). This will execute immediately and create the taxable event you need. 4. **Avoid the worthless security claim** unless you truly received zero compensation. The IRS audits these heavily, and if you received even minimal payment, it doesn't qualify. The good news is that either way, you'll be able to claim most of your $5.5k as a capital loss. The documentation from your broker will make everything clear and defensible if questioned.

I went through this exact same situation with my First Republic shares last year, and after working with my tax preparer, here's what we discovered: The key is determining what actually happened during the JPMorgan acquisition. Most retail shareholders of First Republic did receive some minimal compensation - often around $0.00-$0.50 per share - rather than having truly "worthless" securities. Since your shares still show $4 value in your account, this strongly suggests you received something in the acquisition process. Here's my recommendation: 1. **Contact your broker immediately** and ask for the "Corporate Action Statement" or "Reorganization Details" for First Republic Bank from May 1, 2023. This document will show exactly what you received. 2. **For your limit order issue**: Set your limit price at $0.01 per share (or whatever minimal amount ensures execution). Since your total position is only worth $4, this will execute immediately and give you the realized loss you need. 3. **Report it as a regular sale on Schedule D**: Use May 1, 2023 as the sale date, your original $5.5k as the cost basis, and whatever minimal amount you received as proceeds. 4. **Avoid claiming "worthless securities"** unless you truly received $0. The IRS heavily audits these claims, and if you received any compensation (even pennies), it doesn't qualify. The bottom line: You'll still be able to claim nearly your entire $5.5k loss as a capital loss, but make sure you have proper documentation from your broker first. Don't let the complexity paralyze you - this is actually a fairly straightforward transaction once you get the right paperwork.

Has anyone considered that maybe there's no tax at all? My understanding is that gifts under the annual exclusion amount don't trigger tax consequences for the recipient. When your grandfather gave it to your dad and when your dad gave it to you, if the value was under the gift tax exclusion limit each time, wouldn't that mean your basis is just the fair market value at the time you received it?

This is exactly the kind of situation where getting professional help upfront can save you major headaches later. I dealt with something similar when my aunt gave me her vintage watch collection - no receipts, no appraisals, just family pieces passed down over generations. Here's what I learned: the IRS expects you to make a "good faith effort" to establish basis, but they're reasonable when original documentation doesn't exist. I ended up working with a tax professional who helped me create a defensible basis calculation using historical gold prices, comparable sales data, and a professional appraisal. One key point - make sure you understand the holding period rules. Since these were gifts, your holding period includes the time your grandfather and father owned them, so you'll likely qualify for long-term capital gains treatment. But as others mentioned, gold jewelry is taxed as a collectible at up to 28% for long-term gains, not the lower rates for stocks. Document everything you do to establish the basis - your research, appraisals, conversations with family members, anything that shows you made a reasonable effort. This paper trail will be invaluable if you're ever questioned about your calculations.

Another strategy worth considering is a Charitable Remainder Trust (CRT) if you have any philanthropic interests. This can be particularly effective for highly appreciated farmland since you get an immediate charitable deduction, avoid capital gains tax on the sale, and receive income for life. The CRT sells the property tax-free, then pays you a percentage annually (typically 5-8%) for either a term of years or your lifetime. At the end, the remainder goes to charity. If you don't need the full value immediately and want to support causes you care about, this could provide steady income while significantly reducing your current tax burden. You could also combine this with life insurance to replace the charitable remainder for your heirs if that's a concern. The tax savings from the charitable deduction can help fund the premium payments.

Given the complexity of your situation with inherited farmland in a family trust, I'd strongly recommend getting a professional analysis before making any major decisions. Each trust structure is unique, and the tax implications can vary dramatically based on factors like the type of trust, basis step-up rules, and your specific ownership percentage. One consideration that hasn't been fully addressed is the potential impact of the Net Investment Income Tax (NIIT) on your proceeds. If your trust is subject to NIIT, you could face an additional 3.8% tax on investment income, which might influence whether distributing the property before sale or keeping it in trust is more advantageous. Also, since you mentioned all co-owners are relatives, make sure you understand how the sale will be structured. If the trust is selling the entire property as one transaction, you'll need coordination among all beneficiaries for strategies like 1031 exchanges or installment sales. The "patient" approach you mentioned is smart - rushing into a decision could cost you significantly in taxes. Consider consulting with both a trust attorney and a tax professional who specializes in agricultural property transactions to model out different scenarios before proceeding.