This is really helpful advice. Should we get an attorney involved to draft the documents properly? Is there anything specific we should include in the promissory note to make it clear this is a legitimate loan transaction?

Yes, I would definitely recommend having an attorney draft or at least review your documents. The cost of legal help upfront is much less than dealing with IRS issues later. Make sure your promissory note includes all standard loan terms - principal amount, payment schedule, consequences for default, security interest in the property, etc. Even though there's no interest, everything else should look like a standard loan. Also include language acknowledging that both parties understand there may be imputed interest for tax purposes. Having your uncles keep a payment ledger showing receipt of your payments provides additional documentation of the loan's legitimacy.

That's actually a really good point. I went through something similar and was able to deduct the imputed interest against the rental income I was receiving. Definitely helped offset the tax burden on the rental income!

Do they handle Schedule C for small businesses? I have a side hustle selling crafts online and I'm trying to file properly without spending a fortune.

Yes, they do handle Schedule C for small businesses and side hustles. I actually started using them when I had a small consulting gig on the side. It covers all the common business deductions and expenses. The interface for business income isn't quite as polished as TurboTax's, but again, completely free is hard to beat. If you have inventory for your crafts business though, just be aware you'll need to understand the basics of how to track that yourself - this is true of most DIY tax software.

That's interesting - I've always been hesitant about the cost of a CPA, but I never thought about the year-round advice aspect. How did you find your CPA? And did you interview multiple people before choosing?

Yikes, that's exactly what I'm worried about. He's suggesting we file jointly but says he can't pay me his portion until he gets his tax refund from a previous year that's still processing. Did you find that you lost a lot of tax benefits by filing separately? I'm worried about losing my education credits.

That's a huge red flag! If he's waiting on a prior year refund, there's a good chance the IRS is holding it for some reason - maybe prior tax debt, child support, or other government debt. That refund he's counting on might never arrive or might be much smaller than he expects. I did lose some tax benefits filing separately. The biggest hits were lower thresholds for certain deductions and credits and losing the ability to contribute to a Roth IRA (my income was too high for separate filing but would have qualified under joint). However, my education credits actually worked out better filing separately because they have income limits that are easier to stay under with just my income. In your case, with a significant income difference and you being a student, filing separately might actually preserve more of your education credits. The American Opportunity Credit and Lifetime Learning Credit both start phasing out at lower combined income levels.

This is super helpful! One more thing to add - if you file separately and your spouse itemizes deductions, you CANNOT claim the standard deduction. My ex itemized without telling me, and I had to redo my whole return. Also, the income threshold for education credits drops dramatically for married filing separately - I think it's around $10,000 for some credits, which might be below your income.

Thanks for this perspective. I'm worried the IRS might see it that way too. Do you think I should consult with a tax attorney before selling? I'm concerned about potential penalties beyond just calculating the basis wrong.

Consulting with a tax attorney would definitely be a good idea in your situation. They can review the specific details of your transfers and advise you not just on the correct basis calculation but also on any potential exposure you might have regarding the transfers themselves. A good tax attorney can also help you understand the statute of limitations that might apply to your situation and develop a strategy for how to properly document and report the sale to minimize your risk of problems down the road. The peace of mind alone is probably worth the consultation fee.

That's a really good point. For transfers of real estate without consideration, you're supposed to file a Form 709 (Gift Tax Return) even if no gift tax is owed because of the lifetime exemption. If those weren't filed, that could be another issue to address.

I didn't even realize there was a worksheet! I'll definitely look into that option. And yeah, the new form looks completely different from what I remember filing years ago - the elimination of allowances really threw me off. Thanks for the pointer about the worksheet!

Happy to help! The worksheet is actually on page 3 of the W4 form PDF from the IRS website. It's pretty user-friendly for simple situations like yours. Just be sure you're using the 2025 version of the form since they adjust the numbers slightly each year. Another tip: after you submit your W4, check your first couple of paystubs carefully to make sure the withholding looks reasonable. If it seems way off, you can always submit a new W4 to adjust. Most payroll systems let you update it anytime.

That's actually not how the new W4 works anymore. There's no place to put "0" since they eliminated allowances in 2020. The form is completely different now. You'd need to add an additional amount to be withheld on line 4(c) if you want extra withholding.