Does Drake's cloud functionality allow multiple preparers to work on the same return simultaneously? That's one feature I really need in a cloud solution.

I'm using Canopy for practice management and client interaction, but their tax module is still very limited. They've scaled back their tax prep ambitions significantly from what they originally announced. It handles basic individual returns but is nowhere near ready for complex business returns. Great practice management system though!

1 That's a good point I hadn't considered. My brother did continue living there those 6 months before buying us out. We didn't charge him rent since we were figuring out the estate. Would that create any tax issues? The executor (my older brother) just had him pay the utilities during that time.

22 In most cases, this wouldn't create significant tax issues for you as the person selling your share. The rental value question typically affects the person living in the property (your brother) or possibly the estate during administration. Since this was a relatively short period (6 months) and you were in the process of settling the estate, the IRS is unlikely to be concerned about the lack of rental payments. The main focus for your tax reporting remains the sale of your inheritance share and ensuring you correctly report the basis as the fair market value at the date of death.

16 Most major tax software (TurboTax, H&R Block, TaxAct) can handle inheritance and property sales. The key is making sure you enter the correct basis information. When it asks about the sale of property and you input the 1099-S information, it should specifically ask if this was inherited property and when the person died, then calculate the stepped-up basis correctly.

This is actually really helpful! So the TIN is just the umbrella term? Are there any other types of TINs besides SSN and EIN that regular people might encounter?

Yes, TIN is exactly that - the umbrella term for various tax identification numbers. Besides SSNs and EINs, there are a few other types regular people might encounter. The most common alternative is the ITIN (Individual Taxpayer Identification Number), which is used by residents who need to file taxes but aren't eligible for an SSN, like certain visa holders or non-resident aliens. Another one is the PTIN (Preparer Tax Identification Number) which is used by professional tax preparers - you might see this on your tax return if someone else prepared it for you.

is there ever a case where a normal person (not a business) would have a different TIN than their ssn? like what if someone isn't a citizen?

This is really helpful advice, thanks! I've been tracking sales but not as formally as you described. Do you have any recommendations for good software or templates to use for this kind of tracking? And do you know if there's a revenue threshold where requirements become stricter?

For your level of business, a well-organized spreadsheet is actually sufficient - that's what I still use. I created columns for purchase date, purchase price, sale date, sale price, platform fees, and profit calculation. I also keep a separate tab for business expenses like software subscriptions. The requirements get significantly stricter once you exceed €22,000 in annual turnover, as you'll lose the Kleinunternehmer status and need to deal with VAT (Umsatzsteuer). Once you hit €60,000 annual profit, you'll need to use double-entry bookkeeping (doppelte Buchführung) instead of simple income-surplus calculation (EÜR). At your current scale, though, the detailed spreadsheet approach should be sufficient for the Finanzamt.

This is such an important point that people miss. My friend got hit with a huge health insurance adjustment bill because he didn't realize his side business income would affect his calculation. The Krankenkasse recalculated two years of premiums retroactively!

Thanks for the reminder about responding by the deadline. The due date is in about 3 weeks, so I have a little time. Do you know if I'll get a separate bill for the penalties and interest, or will that be included in what I pay when I agree to the CP2000 assessment?

When you agree to the CP2000 assessment, the response form will show the total additional tax amount they're proposing. This typically includes the 10% early withdrawal penalty for the Traditional IRA portion, but it does not include interest and potential late payment penalties. Those additional amounts will be calculated and included in the actual bill you receive after you've agreed to the assessment. The IRS will send you a separate notice (usually a CP22A) with the final amount including any interest and penalties. Interest continues to accrue until the amount is paid in full. If you're concerned about the total, it's definitely worth requesting an installment agreement either with your CP2000 response or when you receive the final bill. You can use Form 9465 to request a payment plan.

This is such an important point! I did the same thing and it caused all kinds of confusion. The IRS forms change slightly from year to year, and using the wrong one can really mess things up.