That's a good point about the tax treaty - I didn't even think about that angle. Do you know if these tax treaties typically address dependents specifically, or are they more focused on the student's own tax obligations? Also, I've never heard of Form 8843 before. Is that something she would file separately from her regular tax return?

Tax treaties typically focus more on the student's own tax obligations rather than their status as someone else's dependent. The US-Canada tax treaty (Article XX) has provisions that may exempt certain scholarship or fellowship income from US taxation for Canadian students, but it doesn't directly address dependent status. Form 8843 is filed separately if she doesn't need to file a tax return, or alongside her tax return if she does need to file one. All F-1 students must file this form regardless of whether they earned any income, as it's essentially telling the IRS "don't count my days in the US for the substantial presence test because I'm exempt as a student.

Is the Other Dependent credit different from claiming someone as a dependent? I thought they were the same thing.

Thanks, this is exactly what I needed to know! For tracking business vs personal use, would a simple log be sufficient or do I need something more formal? I probably use it about 85% for the Amazon business and 15% for personal browsing.

A simple log would work fine, but be consistent with it. I recommend creating a spreadsheet where you track hours of use and categorize them as business or personal. Do this for a representative time period (at least a few weeks) to establish your usage pattern. The key is having something contemporaneous - meaning you're tracking it as you go, not trying to recreate it later if you get audited. Also take screenshots of your work on the computer for the business as additional evidence. The IRS is particularly interested in seeing that high-cost assets claimed as business expenses are actually being used for business purposes.

I think the "hobby loss rule" is that you need to show a profit in 3 out of 5 consecutive years to automatically be considered a business. Otherwise you need other evidence that it's a legitimate business attempt.

Good point! I just double-checked my statements and there was actually a small cash payment of $37.42 for a fractional share. But the CP2000 is claiming I owe taxes on the entire value of all converted shares, not just this tiny cash amount. Could this small cash payout be why the entire transaction got flagged?

Yes, that's exactly what probably happened! The cash-in-lieu payment triggered a report to the IRS, but then the entire transaction got mischaracterized. This is super common. Your response to the CP2000 should acknowledge this small taxable amount (the $37.42) but explain that the remainder of the transaction was a tax-free reorganization. Include your Morgan Stanley statements showing both the share conversion and the small cash payment. The IRS should adjust their proposed assessment to only tax the cash portion, which would be a much smaller amount than what they're currently claiming.

This is such a good point. I went through an acquisition with Exxon back in 2019 and completely lost track of my original basis. Had to pay an accountant $500 to reconstruct everything when I sold some shares last year. Save yourself the headache!

Would this work even if the stock is only worth like $200? Seems like a lot of hassle for the charity for such a small amount. And how do you claim the deduction - is it complicated to do on your taxes?

Yes, it works even for smaller amounts! Many charities are set up to handle stock donations of all sizes. While some very small local organizations might not have the infrastructure, most medium to large charities definitely do. For claiming the deduction, it's straightforward if you itemize deductions on Schedule A. You'll get a receipt from the charity showing the donation value (usually the market value on the transfer date). If the stock is worth more than $500, you'll also need to fill out Form 8283, but the form isn't particularly complicated. For very small donations, make sure the tax benefit of itemizing would exceed the standard deduction, otherwise there's no additional tax advantage.

Did you have to pay any fees to sell through Computershare? I heard some transfer agents charge like $25-50 for selling shares which seems ridiculous if the stock isn't worth much.

Omg you're right! I just double-checked my transcript and it's actually a 769 code, not 849. I totally misread it. Now I'm even more confused what that means. Is that better or worse than what I thought?

A 769 code typically indicates an earned income credit (EIC) claim on your return. This is just informational and shows the IRS has processed that part of your return. It's neither better nor worse than what you thought - it's just tracking different aspects of your return processing. What you should be looking for is either a 570 code (which would indicate a temporary hold) or an 846 code (which means your refund has been approved and issued). The 769 by itself just acknowledges your EIC claim was received and being processed. If you don't see a 570, that's actually good news - it means there's no specific hold on your account.

Tax Advocate Service is only accepting cases with real hardships now - like you're about to be evicted or have utilities shut off. They won't help with just checking refund status. They're super backlogged and turned me away when I called last week about my delayed refund.