11 Wouldn't a 1031 exchange only work if both properties are investment properties? OP's house is currently their primary residence, so I don't think that would qualify.

3 You're right, and that's an important distinction. For a 1031 exchange to work, the property must be held for investment or business purposes. In OP's case, they would need to convert their primary residence to a rental property first, rent it out for a period (usually at least a year), and then they could potentially use a 1031 exchange. Alternatively, OP could look into the primary residence exclusion, which allows you to exclude up to $250,000 ($500,000 for married couples) of capital gains when selling your primary residence if you've lived there for at least 2 of the last 5 years.

19 Yeah this is super important! When I converted my home to a rental last year, my accountant explained that the basis for depreciation becomes the LOWER of either your adjusted basis or the fair market value at the time of conversion. This made a big difference in my depreciation calculations.

2 You're absolutely right. When converting a primary residence to a rental property, the depreciation basis is the lower of the adjusted basis (original cost plus improvements, minus any depreciation already taken) or the fair market value at the time of conversion. This is an important point because it affects how much depreciation can be claimed each year, which is a significant tax benefit of owning rental property. Also, don't forget that land isn't depreciable, so the basis needs to be allocated between the building (depreciable) and land (non-depreciable).

Is this kind of error common? Seems like a major screwup that could mess with people's taxes.

Oh that makes sense! I thought they just sent me duplicates by mistake. So much about taxes is needlessly confusing lol.

Thanks for sharing your experience! Did you have to deal with the FBAR (Foreign Bank Account Reporting) requirements once you made the election to treat your spouse as a US resident? That's one concern I have about going that route.

Yes, making the election meant we had to report her foreign accounts on FBAR if they exceeded $10,000 combined at any point during the year. We also had to file Form 8938 for foreign financial assets. The additional reporting requirements added some complexity, but for us, the tax savings from filing jointly outweighed the extra paperwork. The key was documenting everything meticulously and using the foreign tax credits correctly to avoid double taxation. Make sure you consider these reporting requirements if you're thinking about making the election.

I e-filed successfully using H&R Block online. TurboTax has issues with ITINs sometimes. Make sure the ITIN hasn't expired - they need to be renewed if not used on a tax return for 3 consecutive years.

I hadn't even thought of that! Great idea, I'll check with HR tomorrow. We do have a pretty decent benefits package at my main employer, so there might be something there. Thanks for the suggestion!

I did exactly this and it worked well. Had the CPA show me what documentation to keep for the home office deductions especially. Now I just use FreeTaxUSA and it's easy.

That's such a good point. Do you think it's a red flag if they're still using mostly paper documents instead of digital systems?

It's not necessarily a deal-breaker if they use paper documents, but it's definitely something to consider. In my experience, CPAs who have embraced secure digital document sharing, e-signatures, and modern client portals tend to be more efficient and organized overall. These systems create automatic backups and make it easier to find information quickly. That said, some excellent accountants still prefer traditional methods. If they use paper but have rock-solid systems for tracking and organizing everything, that can work too. The real red flags are disorganization, frequently misplacing documents, or making you resend information multiple times regardless of whether they're using paper or digital systems.

This is so important. My CPA gives me an estimate range before starting work, and if something comes up that will push it higher, she calls to discuss first. That transparency is worth its weight in gold.