7 That sounds terrifying! How long was his bankruptcy and how much extra time did it add to the collection period? I'm wondering because I did a Chapter 13 a few years ago and now I'm worried about my tax debts.

14 His bankruptcy added almost 3 years to the collection period. The CSED clock stops completely during the bankruptcy plus 6 months afterward. His Chapter 7 lasted about 8 months, but with the additional 6-month suspension, that's 14 months total that got added to his 10-year period. Chapter 13 bankruptcies typically last 3-5 years, so that could potentially add a substantial amount of time to your collection period. I'd definitely recommend getting your transcripts and having someone calculate your actual CSED dates taking the bankruptcy into account.

17 Yes, the IRS often becomes more aggressive with collection actions as the CSED approaches. Filing a Notice of Federal Tax Lien is definitely something they consider when the clock is running out. The important thing to understand is that even if they file a lien shortly before the CSED expires, the lien should self-release when the collection statute expires.

This is really helpful! I didn't know about this grouping election at all. Where exactly do I make this election? Is it something I need to file separately or is it part of the regular tax forms?

You make the grouping election by attaching a statement to your tax return in the year you want to start the grouping. The statement should identify the properties you're grouping together and state that you're treating them as a single activity for passive activity purposes under Regulation 1.469-4(c). Once you make this election, it's binding for future years unless your facts and circumstances change significantly. The statement doesn't have a specific form - it's just a written declaration attached to your return. Many tax software programs don't prompt you for this, so you may need to create it separately and attach it as a PDF if filing electronically.

What tax software did you use when you got audited? I'm wondering if some programs flag these deductions more than others.

I used TurboTax when I got audited. I don't think it was the software that triggered the audit though - from what the auditor told me, it was more that claiming real estate professional status with significant losses is just a common audit trigger, especially with higher household income. The auditor specifically looked for contemporaneous documentation - meaning records created at the time I did the work, not reconstructed later. They were suspicious of round numbers (like exactly 4.0 hours) and wanted to see variation in my time logs to make them seem more authentic. My recommendation: keep a daily log using a time-tracking app or detailed calendar entries.

Thanks for the advice on the tiebreaker rules. I didn't know parents get priority over non-parents. That's really helpful. I definitely have plenty of documentation showing my daughter doesn't live with the boyfriend full-time. Our custody is actually 60/40 with me having the 60%, so I have her more than half the year anyway. So even if my ex was trying to claim her in her years, sounds like I'd win the tiebreaker?

Yes, with 60% custody, you definitely have the stronger claim under the IRS residency test since your daughter lives with you for more than half the year. And you're right - biological parents do have priority over non-parents in tiebreaker situations. The fact that you have majority physical custody actually means you could technically claim your daughter every year under IRS rules, regardless of what your custody agreement says. However, be aware that violating your custody agreement (even if IRS rules would allow it) could potentially lead to family court issues. Some judges take tax provisions in custody agreements very seriously.

I'd also recommend getting the custody agreement clarified through the court if possible. My ex tried pulling something similar, and we ended up going back to court to get specific language about tax benefits added to our custody order.

Thanks for sharing your experience! How complicated was it to file the amendment? I've never done one before and I'm worried I'll mess it up somehow.

Filing the amendment through TurboTax was pretty straightforward. Since you already filed with them, you just log in, choose the option to amend your 2023 return, and follow the prompts. It'll ask what you're changing, and you'd select "income" and then add the 1099-R information. The system recalculates everything automatically. Just review the changes carefully before submitting. If your situation is simple like mine was (just adding a missed form), it shouldn't take more than 30-45 minutes. The hardest part is waiting for processing - paper amendments can take 6+ months to process currently.

Not the OP, but I think that's what they meant by "Form G" - they were referring to the distribution code in box 7. That's super important for determining the tax treatment.

You're right - it does have code G in box 7. I just double-checked the form. Does that change anything about how I should handle this?

Does the primary residence exclusion apply to nonresident aliens too? I thought that was only for US citizens and residents.

You're right to question this - the primary residence exclusion actually doesn't apply to nonresident aliens. I should have been more clear about that. While US citizens and resident aliens can exclude up to $250k/$500k of gain on a primary residence, nonresident aliens generally cannot take advantage of this exclusion. However, the reduced withholding rate (10% instead of 15%) for properties under $1 million that will be used as the buyer's residence still applies regardless of the seller's status. This is just for the withholding amount though, not the final tax liability.

Can u file the 8288-B yourself or do u need a tax preparer to do it?