Thanks for this advice! I checked and the second form is dated 10 days after the first one. I'll definitely send it certified mail with tracking. Should I also include a copy of my payment confirmation with the signed form?

Yes, absolutely include a copy of your payment confirmation with the signed form. This creates a clear paper trail showing you've both agreed to the adjustment and paid the amount due. I'd also recommend writing your Social Security number and tax year on every page you send them. This helps ensure your documents stay together if they get separated during processing.

This happens more than you'd think. The IRS exam department sometimes issues preliminary findings before they have all information. Usually it's because they received additional third-party reporting after the first assessment. Likely something like a 1099 or K-1 that wasn't originally matched to the return.

Thanks, this is super helpful. So if I understand correctly - transferring to Robinhood isn't taxable, but I need to make sure I have documentation ready for my cost basis when I do sell, since Robinhood won't have that info? Would it make more sense to sell on my current exchanges where at least some transaction history exists, rather than moving to Robinhood first?

That's exactly right - transferring isn't taxable, but you need to document your cost basis for when you do sell, since Robinhood won't have that information. As for whether to sell on current exchanges versus transferring to Robinhood first, that's a great question. There's a potential advantage to selling on exchanges where you have some transaction history, as you could potentially have more documentation to support your reported cost basis. However, if those are foreign exchanges, they might not issue U.S. tax forms, which could create other complications. If your current exchanges can provide transaction history reports that show your purchases, that documentation could be valuable regardless of where you ultimately sell. The key is having a defensible way to calculate and document your gains.

Is that true even for transactions that happened before they became a permanent resident? I thought you only had to worry about US taxes once you actually became a resident.

Oh no, I hadn't even thought about state taxes! We're in New York - do you know if they follow the federal rules for foreign income or have their own system? This is getting more complicated by the minute.

New York generally follows federal rules for income inclusion, so if you're reporting the rental income on your federal Schedule E, you'll need to include it on your NY return too. The one benefit is that NY does allow credits for foreign taxes paid, similar to the federal system. Some states like Nevada or Florida might be more advantageous for people with significant foreign income since they don't have state income tax. But for now, plan on reporting that Belgian rental income on both federal and NY returns.

Good point! Though I think Form 8833 is only required if you're taking a position that's contrary to the treaty or if you're claiming the treaty overrides an internal US law. Not everyone with foreign property needs it.

This is so helpful! My uncle's IRA is traditional, not Roth, so sounds like I do need those annual RMDs. Is there any way to convert it to a Roth now to avoid the annual RMDs and just deal with the 10-year rule?

You can convert an inherited traditional IRA to an inherited Roth IRA, but be careful - you'll pay income tax on the entire converted amount in the year you do the conversion. This could potentially push you into a much higher tax bracket. If you decide to convert, you'd still be subject to the 10-year rule, but you'd eliminate the annual RMD requirements. Many people find it's most tax-efficient to do partial conversions over several years rather than converting the entire amount at once. I'd strongly recommend working with a tax professional to determine if and how much you should convert each year based on your overall tax situation.

I used TurboTax last year for this exact situation. It handles inherited IRA distributions fine, but you need to make sure you indicate it's from an inherited IRA when you enter the 1099-R information. There should be a specific question about whether this is an inherited IRA. The tricky part is that TurboTax doesn't calculate what your RMD should be - you need to know that number from your financial institution. As long as you distribute at least the RMD amount each year, TurboTax will report it correctly on your tax return.

Thank you! That's really helpful to know. I'll make sure to get the RMD calculation from my bank before doing my taxes. Glad to hear TurboTax can handle this if I input everything correctly.

Do you know if we can just use regular tax software for this? Or do we need something special for self-employment stuff?

Regular tax software will work fine for this amount of self-employment income. All the major ones (TurboTax, H&R Block, TaxAct, etc.) can handle Schedule C and Schedule SE. Some free versions have limitations though, so you might need to pay for a slightly upgraded version that handles self-employment. The software will walk you through the specific questions about your business income and expenses. Just make sure to select the option that indicates you have self-employment or business income when you start the process.

That's true! But isn't the standard deduction only for income tax and not self-employment tax? I think they'd still owe the SE tax even with the standard deduction.