I've considered that, but the inheritance left me really overweighted in just two sectors (finance and healthcare). The financial advisor at Vanguard recommended I diversify since these stocks now make up almost 30% of my total portfolio. I'm just trying to be smart about when and how I make the transition to minimize the tax hit.

I understand wanting to diversify, but consider doing it gradually over a couple of tax years instead of all at once. You could sell enough this year to stay in a lower tax bracket, then do the rest next year. Also worth checking if any of these companies offer dividend reinvestment plans (DRIPs). If they do, you could potentially shift some portion to those programs and slowly diversify without selling and triggering capital gains.

That's actually incorrect. The wash sale rule only applies when you sell at a LOSS and then rebuy within 30 days. OP is dealing with GAINS, so the wash sale rule isn't relevant here at all. Plus, what would be the point of selling at a gain, paying taxes, and immediately rebuying? That would just create a tax bill with no benefit.

Thanks so much for this info! The farm is indeed an S Corp. Would setting up a QSST require getting everyone in the family on board? And how exactly would it help with our tax situation? Sorry if these are basic questions, this farm tax situation is completely outside my experience.

Setting up a QSST would only involve your wife's shares, not the entire family structure. It creates a trust that holds her shares, which can sometimes provide more flexibility in how and when income is recognized. The main benefit would be potential income timing advantages and possibly some estate planning benefits as well. However, it does require proper setup by someone familiar with both trust law and agricultural tax issues. It's not a DIY solution, but depending on the value of the shares and ongoing income, it might be worth the setup costs.

My family uses income averaging and it's saved us thousands. But remember it only helps the active farmers (her brothers who run it), not passive shareholders. The original poster and his wife would still get the K-1 with the same amount of pass-through income regardless.

This is incredibly helpful - I had no idea these options existed. Do these programs stop the levy process right away? And if I apply for an Offer in Compromise, how long does that typically take to process?

Yes, both applying for an Offer in Compromise or being placed in Currently Not Collectible status will stop the levy process immediately. The IRS can't continue collection actions while your offer is being evaluated or while you're in CNC status. The Offer in Compromise process typically takes 6-9 months from submission to decision. During this time, your collection statute (the 10-year period the IRS has to collect) is extended. If your offer is accepted, you'll typically need to pay the settlement amount within 24 months or in some cases as a lump sum within 5 months (which often results in a lower settlement amount).

This is only partly right. The 10-year clock doesn't start until the tax is actually assessed, which requires filing a return or the IRS creating a substitute return for you. For unfiled returns, that clock might not have even started yet!

Is Modelo 210 something I can file online or do I need to physically go to a Spanish tax office? I'm planning to buy but won't be in Spain more than a few weeks each year.

You can definitely file the Modelo 210 online through the Spanish Tax Agency's website. You'll need to get an NIE (Foreigner Identification Number) first, which is required for property purchase anyway. Many non-residents also use a "fiscal representative" in Spain - basically an accountant or lawyer who handles the filing for you. This is often the easiest option if you're only there a few weeks a year. Most of the online filing system is available in English now, which is a big improvement from when I first bought my place five years ago. But the translations can be a bit confusing sometimes, which is why many people just hire a local tax advisor for a few hundred euros per year.

I went through this when my uncle passed and left his Malaga apartment to my cousin. Inheritance tax in Spain varies HUGELY by autonomous region - some regions like Madrid and Andalusia have big exemptions, especially for close family members. But as non-residents, you don't automatically get all the same benefits as residents. The good news is that in 2018, the rules changed to allow non-EU residents to benefit from regional tax rules instead of just the national ones, which are usually less favorable. So definitely check the specific inheritance tax rules for Mallorca (in the Balearic Islands region).

Thank you so much for this info! I had no idea the rules had changed in 2018 - that's a huge relief. I'll definitely look into the specific rules for the Balearic Islands. Did your cousin end up paying a lot in inheritance tax, or were they able to take advantage of the regional exemptions even as a non-resident?

This makes sense. I'm wondering if my preparer is confusing different rules. Do you have any recommendations for tax software that handles Form 1116 and foreign tax credit carryforwards properly?

In my experience, TaxAct Premium handles Form 1116 and foreign tax credit carryforwards correctly. It walks you through the proper allocation of carryforwards and applies them appropriately to your current year US tax liability. I've also heard good things about TaxSlayer Premium for international tax situations, though I haven't personally used it. The key is to make sure you're using a premium or top-tier version of whatever software you choose, as the basic versions often don't include the proper support for Form 1116.

This is excellent advice. I messed this up years ago with my Hong Kong income and it caused a huge headache. Had to amend returns because my preparer put everything in passive category when most should have been general.