I second this. UltraTax has better international diagnostics, but CCH Axcess actually has the best guided worksheets for Form 5471 Schedule J and E calculations in my experience.

Thanks for mentioning CCH Axcess - I haven't tried their international modules yet. I still supplement UltraTax with manual Excel templates for some of the more complex PFIC calculations, especially when dealing with excess distributions from foreign mutual funds. The software's built-in calculations don't always capture all the nuances.

That's brilliant advice! In my corporate role I've worked mostly with manufacturing clients. Do you think that's too narrow a niche to start with? How did you initially market yourself to restaurant owners?

Manufacturing is actually a perfect niche - there are specific tax considerations around depreciation, inventory, R&D credits, and supply chain that general tax preparers often miss. That specialized knowledge will immediately set you apart. For marketing to restaurants, I started by creating a simple one-page guide to "Top 10 Tax Deductions Restaurant Owners Miss" and literally walked door-to-door to local restaurants during their slow hours. I offered a free 30-minute consultation to review their previous returns. About 1 in 5 consultations converted to clients, and from there it was all word-of-mouth. The restaurant community is tight-knit, so once I had a few happy clients, referrals started flowing. You could do something similar with local manufacturing businesses.

I took it last year. It's definitely challenging but manageable if you study consistently. I used the Gleim materials and studied about 15 hours weekly for 3 months. The biggest advantage is being able to represent clients before the IRS in audits, collections, and appeals. I've found that credential has helped me charge higher rates and attract better clients.

Can you explain more about the domicile test? I thought just having an apartment in the new state would be enough to establish residency on the day I moved in. Are there other requirements?

Good question about domicile! Having an apartment alone might not be enough in some states. Domicile is about your intent to make the state your permanent home, not just physical presence. States look at various factors to determine domicile: where you're registered to vote, your driver's license state, where your vehicles are registered, location of bank accounts, where you have professional licenses, community involvement, and even where your family lives if you're splitting time. Some states have specific forms or tests to determine when your domicile officially changed.

You can usually request a private letter ruling from the state tax department, but they often charge a fee (sometimes hundreds of dollars) and it can take months to get. Probably not worth it unless you're talking about a lot of money at stake.

Thanks for the info. Definitely not worth hundreds of dollars since I'm only talking about maybe $2000 in state taxes total. Guess I'll just have to do my best with the reciprocity rules and keep good documentation.

I'm not sure a 1031 exchange would work in my situation. Don't those only apply when you're selling one investment property and buying another? I'm not selling my home, just temporarily renting it out. And I'm not buying the hotel, just staying there temporarily.

You're absolutely right, and I apologize for the confusion. A 1031 exchange wouldn't apply in your situation since you're not selling property. It requires a sale of one investment property and purchase of another "like-kind" property. What might be more applicable in your case is to carefully track all legitimate rental expenses to offset as much of the income as possible - property tax portions, insurance, maintenance, depreciation during the rental period, etc. Those are definitely deductible against your rental income.

Careful with that approach. The IRS can recharacterize arrangements if they appear to be structured mainly to avoid taxes. If the market rate is $2,000 but you charge $1,000 and call the rest a "gift," that could potentially raise flags.

Thanks for that info - I hadn't heard about the moratorium! Do you know if that affects claims that have already been submitted or just new ones going forward?

The moratorium primarily affects new claims submitted after September 14, 2023. Claims already in the system before that date should continue to be processed, though possibly with additional scrutiny. The IRS has also stated they're prioritizing processing the backlog of previously submitted claims, so in some ways, if you already have a claim in the system, this might actually be good news as they focus resources on clearing existing claims before accepting new ones. If you haven't submitted yet, I'd recommend getting your documentation very thoroughly organized before filing.

What software did you use? I'm considering doing this myself but worried about making mistakes like this.