Thanks for the input! That's definitely something I've been considering. Do you think there's any benefit to at least harvesting some gains to "reset" my cost basis higher in case the crypto keeps appreciating? I'm torn between letting it ride versus locking in some gains tax-free while I can.

That's a good point about resetting your cost basis. If you're confident in the crypto's long-term prospects, selling and rebuying to establish a higher cost basis could definitely help you in the future if prices continue to climb. I'd probably take a middle approach - maybe harvest enough gains to use up a portion of your losses while keeping some losses in reserve for future years. That way you're getting some tax benefit now while also positioning yourself better for future growth. It really comes down to your outlook on where crypto prices are headed and your personal cash needs.

As of the 2025 filing season, wash sale rules still don't apply to cryptocurrency. There have been proposals to change this, but they haven't been implemented yet. This is one of the few tax advantages crypto still has - you can sell at a loss and immediately repurchase to harvest the tax loss without waiting 30 days (which would be required for stocks and securities). Just make sure you're keeping detailed records of all transactions since the IRS is paying more attention to crypto reporting these days.

15 Does the SIMPLE IRA allow for Roth contributions like his current solo 401k? I thought SIMPLE IRAs were all traditional pre-tax money. If he's been doing Roth contributions, wouldn't switching to a SIMPLE change his tax strategy pretty significantly?

22 You're absolutely right about the Roth consideration. SIMPLE IRAs don't have a Roth option currently - they're all traditional pre-tax money. This would be a significant change from the solo Roth 401k strategy. If maintaining Roth contribution capability is important, then a regular 401k plan with a Roth option would be needed despite the higher administrative costs. Some providers have started offering more affordable 401k options for small businesses that include Roth capabilities. The tax strategy difference is substantial - immediate tax deduction with traditional contributions versus tax-free growth and distributions with Roth.

11 I use Vanguard for my small construction business (7 employees). The transition from solo 401k was pretty straightforward - about $1200 setup fee and $800 annual administration fee. The bigger issue was the timeline - took about 2 months to get everything set up, so if you're planning to hire in March/April, start the process ASAP. The investment options are solid though, and their customer service has been helpful with the transition questions.

Thanks for all the great advice everyone! So just to make sure I understand: 1) We won't owe capital gains tax on the co-op sale since we've lived there over 2 years and the profit is well under the $500k married exclusion. 2) The gift from my parents and our gift back to them are separate transactions that may require gift tax forms but probably no actual tax. Does that sound right?

Yes, that's exactly right! You won't owe any capital gains tax on the co-op sale because you meet the primary residence requirements and your gain is well below the $500,000 exclusion for married couples. As for the gifts, they're indeed separate transactions. If any single person gives more than $17,000 to another individual in a year, the giver needs to file Form 709 (Gift Tax Return). But this is just for reporting purposes - no actual tax would be due unless someone has already used up their lifetime gift exemption of over $12 million. For example, if your parents are married and gave you $75,000, they could structure it as each giving $17,000 to both you and your wife ($68,000 total) without even needing to file Form 709, with only $7,000 counting against their lifetime exemption.

Do HOA special assessments count toward basis? Our co-op had a major plumbing project and we paid about $8k in special assessments over the years.

If you know someone hasn't been paying taxes for years, can you report them anonymously? Asking for a neighbor who brags about this constantly while driving his new boat...

Yes, you can report suspected tax fraud using IRS Form 3949-A, or by calling the IRS Tax Fraud Hotline. These reports are kept confidential, and you can submit them anonymously, though providing your information might help if the IRS needs clarification (they won't disclose your identity to the person you're reporting). That said, be careful about reporting based solely on someone's bragging. Sometimes people who talk about "not paying taxes" are exaggerating or might actually mean they found legal deductions that reduced their tax bill to zero. The IRS has limited resources and false reports can waste those resources. But if your neighbor is clearly living beyond their means while claiming to evade taxes, that combination of factors might interest the IRS.

So what happens if you file but don't pay for several years? Do they eventually garnish wages or just keep sending letters forever?

Thanks for mentioning this! We actually have the option for both traditional and Roth 401k at our jobs. Sounds like with our income level, traditional might make more sense since we don't qualify for Form 8880 anyway?

Thanks for clarifying that! I've been trying to decide between traditional and Roth for my 401k contributions. My second question - does Massachusetts treat 401k contributions differently than the federal government for state income tax purposes?

This is a great point! I think a lot of people miss this. Increasing your traditional 401k contributions can sometimes make you eligible for other credits and deductions that have income limitations, not just potentially the Saver's Credit.