What if they don't know what the fair market value was when they started renting it? Is there a way to figure that out after the fact? My property was inherited so I have no idea what it was worth when I started renting it out 8 years ago.

You can establish the fair market value retroactively. One approach is to look at comparable sales in the same neighborhood around that time period. Real estate websites sometimes have historical data, or you could ask a realtor to help with a retroactive market analysis. You could also check property tax assessments from that year, though these are often lower than actual market values. Typically you'd take the assessed value and apply a multiplier based on your county's assessment ratio. Another option is to get a professional retroactive appraisal. Some appraisers specialize in this. It costs money but provides good documentation if you're ever audited.

How did you calculate the land value portion? That's the part I'm stuck on with my rental. I know you can't depreciate the land, but I'm not sure how to determine what percentage is land vs building.

Thanks for this suggestion! I don't *think* I filed an amended return (unless the tax software did something automatically I wasn't aware of). But the identity theft angle is concerning me now. If someone else filed using my SSN, how would I even know? Would it show up clearly on my transcript or would it be hard to spot?

If someone filed using your SSN, you would typically see some red flags on your transcript. Look for any entries showing two tax returns processed or unusual refund amounts that don't match what you received. The transcript might show codes like "duplicate filing" or "potential identity theft case." Another sign would be if your transcript shows income amounts significantly higher than what you actually earned. In most cases of tax identity theft, the fraudulent return is filed early to claim a refund before the legitimate taxpayer files. If you suspect identity theft might be involved, you should contact the IRS Identity Protection Specialized Unit at 800-908-4490 right away. They have special procedures for these cases that are separate from the normal assessment dispute process.

How long did it take to get resolved after you sent in the documentation? I'm in a similar situation and trying to figure out if I should just pay it to stop the interest from accumulating or wait for them to process my documentation.

What if I filed in a different state last year? Does that affect the AGI I should be using for verification?

Your federal AGI is what matters for IRS verification, regardless of which state you filed in last year. The state you lived in doesn't change your federal AGI number. Your AGI is on line 11 of your 2021 Form 1040, and that's the number you should use for verification even if you moved to a different state.

How long did it take to get the transcript? I need to file ASAP and don't have time to wait for mail.

This is really interesting history! Do you know if other countries handle this differently? Like do European countries have marriage penalties too?

Many European countries use individual taxation regardless of marital status, which eliminates the marriage penalty entirely. Countries like the UK, Sweden, and Spain tax individuals rather than couples, so getting married doesn't change your tax situation. Some countries like France use a family quotient system where total household income is divided by the number of family members (with children counting as partial members) before applying tax rates. This creates marriage bonuses rather than penalties. Germany has a system where married couples can effectively split their income evenly for tax purposes, which benefits couples with disparate incomes but is neutral for equal earners. The US system is actually unusual in how it potentially penalizes dual-income married couples compared to most developed nations.

Omg yes! This is exactly what happened to us with student loan interest! When we were both single we could each deduct our student loan interest, but after marriage we lost most of the deduction because of the phase-out. Wasn't expecting that at all!

That must have been an unpleasant surprise! The student loan interest deduction is a perfect example - singles can deduct up to $2,500 if their income is under $85,000 (phasing out starting at $70,000). But for married couples, it starts phasing out at $145,000 and completely disappears at $175,000. So two people each making $75,000 would get partial deductions as singles, but married they might get nothing. It's these little details that can really add up to a significant marriage penalty that goes beyond just the tax brackets themselves.

Good point about the state tax! I didn't even think of that. How long would the state typically take to catch up after an IRS audit?

States usually find out within a year after the IRS audit is completed. The IRS and state tax authorities share information, though the timing varies by state. Some states automatically adjust your state tax when they receive info about federal changes, while others require you to file an amended state return within a specific timeframe (usually 30-90 days) after your federal adjustment. If I were you, I'd be proactive and check with your state tax department now. It's always better to address it early rather than let additional interest accumulate if you do owe more.

I'd just pay it. In my experience, amending old returns is a headache and often triggers more scrutiny. Plus you'd still owe the interest regardless.