This has been such an enlightening thread! I'm dealing with a very similar situation with my own 1031 exchange right now, and reading through everyone's experiences has really helped clarify the basis calculation process. One thing I wanted to add that hasn't been mentioned yet is the importance of timing when it comes to basis adjustments. If your uncle made any capital improvements to the San Diego property during the exchange period (between when he identified the replacement property and when the exchange was completed), those improvements need to be handled carefully in the basis calculation. Also, for anyone else following this thread, I learned that if you're doing a reverse exchange (where you acquire the replacement property before selling the relinquished property), the basis calculation can get even more complex because of the temporary financing arrangements involved. @Anastasia Popov - given all the great advice in this thread, I'd strongly recommend creating a comprehensive documentation package now with all the receipts, depreciation schedules, and transaction records. Even if everything seems clear today, having it all organized will be invaluable if the IRS ever has questions or when your uncle eventually sells the Phoenix property. The consensus seems to be that while 1031 basis calculations can be tricky, they're definitely manageable with good record-keeping and attention to detail. Best of luck with your uncle's situation!

This thread has been absolutely invaluable! I'm currently helping my elderly neighbor with her 1031 exchange paperwork and was completely overwhelmed by the basis calculation requirements until I found this discussion. One additional consideration I discovered through our process is the importance of properly allocating basis between land and depreciable improvements when you acquire the replacement property. The purchase contract and property tax assessments usually provide guidance on this split, but it's crucial to get it right since only the building portion can be depreciated going forward. Also, for anyone dealing with older properties like we are (hers was purchased in 1998), don't forget to account for any changes in depreciation methods that may have occurred over the years. The IRS switched from ACRS to MACRS in the mid-80s, and there were other modifications that could affect your accumulated depreciation calculation. What really helped us was creating a timeline document that shows: purchase date, major improvements with dates and costs, depreciation method used each year, and any changes in use (personal to rental, etc.). This visual timeline made it much easier to ensure we weren't missing any basis adjustments. The expertise shared here by everyone - from tax professionals to people who've actually completed exchanges - has made what seemed impossible much more manageable. Thank you all for taking the time to share your knowledge!

As someone who's been doing gig work for a few years, I'll echo what others have said - you definitely need to report the income. But here's something that might help: even though your meal expenses during deliveries aren't deductible (as Diego correctly pointed out), don't forget about some other potential deductions that are easy to miss. For example, if you bought any insulated bags, phone mounts, or other equipment specifically for deliveries, those are legitimate business expenses. Also, if you had to pay any fees to DoorDash or other platforms, those would be deductible too. One thing I learned the hard way - start tracking everything now for 2025, even small expenses. Get a mileage tracking app or keep a simple log. It makes tax time so much easier when you have good records from the beginning rather than trying to reconstruct everything at the end of the year. Good luck with your filing! The good news is that with your mileage deduction alone, you'll likely owe very little or nothing in taxes.

I work for a tax preparation service and want to emphasize what others have said - you absolutely must report all income, even if it's just $780. Since you made over $600, DoorDash definitely sent you (and the IRS) a 1099-NEC form, so they already know about this income. The good news is your math is probably right about the deductions. With 650 miles at the 2024 standard rate of 67 cents per mile, you're looking at about $435 in mileage deductions alone. That would bring your taxable profit down significantly. However, be careful about those meal deductions - as Diego mentioned, just buying food because you're hungry during your shift isn't a legitimate business deduction. The IRS is very specific that meals are only deductible for overnight travel or actual business meetings. My advice: file Schedule C to report the income and claim your legitimate deductions (mainly mileage and any equipment you bought). You'll likely end up owing little to nothing after deductions, but you'll be compliant with tax law and have a paper trail if you continue gig work next year.

One thing to keep in mind is that if you're flying frequently for board meetings, consider whether the nonprofit might be able to offer partial reimbursement or if they have any corporate travel partnerships that could reduce your costs. Some nonprofits have arrangements with airlines or hotels that volunteers can use. Also, be aware that if you combine any personal activities with these trips (like visiting friends or extending your stay for leisure), you'll need to allocate expenses appropriately. Only the portion directly related to the nonprofit work is deductible. The IRS is pretty strict about this - if you extend a 1-day meeting into a 3-day trip for personal reasons, you can't deduct the extra hotel nights or meals. For record-keeping, I'd suggest creating a simple spreadsheet for each trip with dates, purpose, expenses, and any reimbursements received. This makes it much easier when tax time comes around and helps demonstrate the business purpose if your return is ever questioned.

Great question! I went through a similar situation when I moved across the country but stayed on my nonprofit board. You're absolutely right that these can be deductible as charitable contributions. A few additional tips from my experience: 1. **Keep a travel log** - I created a simple document for each trip noting the departure/return times, meeting duration, and business purpose. This really helped when organizing my tax documents. 2. **Consider timing strategy** - If you have flexibility, try to cluster multiple board activities into single trips when possible (like board meeting + committee meeting). This can make your travel more cost-effective while maintaining full deductibility. 3. **Save boarding passes and meeting materials** - I keep digital copies of my boarding passes and meeting agendas together in one folder. It creates a clear paper trail showing the business purpose and timing of each trip. 4. **Ask about virtual options** - While not always possible for all meetings, see if the board offers hybrid attendance for some meetings. This can help reduce your overall travel costs while still maintaining your board engagement. The documentation you're already keeping (receipts, etc.) sounds like you're on the right track. Just make sure the nonprofit can provide their 501(c)(3) determination letter if needed for your records.

Just want to add that if the person absolutely refuses to provide their SSN and you still pay them anyway, YOUR ORGANIZATION will be responsible for the backup withholding (24% of what you paid them). And the IRS can assess penalties for failure to obtain a W-9!!! I learned this the hard way with our arts nonprofit. We were fined $250 per missing W-9 during an audit. Plus we had to pay the backup withholding we should have collected. Totaly wiped out our small reserve fund.

Based on my experience with our local community center's nonprofit, I'd strongly recommend being very clear with your media person about why you need their SSN and what protections are in place. Many people don't realize that the W-9 form they're completing stays with your organization - it's not sent to the IRS. You might also explain that this is a standard business practice for any organization paying contractors over $600, not just nonprofits. Sometimes framing it as "this is what every business does" rather than "the IRS requires this" makes people more comfortable. If they're still hesitant, you could offer to show them your organization's data security policies or explain how you store and protect sensitive information. We found that transparency about our processes helped reluctant contractors feel more confident about sharing their information. One last suggestion - if the promotional work might extend beyond this year, make sure you're tracking payments by calendar year, not by project. You could potentially split the work across two calendar years to stay under the $600 threshold if that makes sense for your timeline.

I'm dealing with almost the exact same situation! Freelance web developer working from a tiny 450 sq ft apartment with no possibility of a dedicated office space. I've been hesitant to claim any utility deductions because I thought I needed that formal home office setup. After reading through all these responses, I'm definitely going to try the Kill-A-Watt meter approach - that seems like the most bulletproof way to document actual business usage. I'm curious though, for those who have been doing this for multiple years, have you noticed any patterns in how your business percentages change over time? My work situation fluctuates quite a bit - some months I'm mostly at client sites, others I'm home 90% of the time. I'm wondering if it's better to calculate an annual average or adjust percentages quarterly based on actual usage patterns. Don't want to overcomplicate things but also want to be as accurate as possible. Also, has anyone run into issues with their tax software properly handling these partial utility deductions? I use TurboTax and want to make sure it can handle the complexity before I start all this tracking.

I'm also a freelancer working from a small space without a dedicated office, and I wanted to share what I learned after being audited last year (yes, it happened, but everything worked out fine!). The auditor was actually really reasonable about utility deductions when I could show clear documentation. Here's what they specifically looked for: 1. **Consistent methodology**: They wanted to see that I used the same calculation method throughout the year, not random percentages that changed monthly. 2. **Business purpose documentation**: I kept a simple log showing what work activities required utilities (video calls need internet, rendering projects use lots of electricity, etc.). 3. **Reasonable percentages**: They flagged anything over 50% as potentially aggressive unless you could really justify it. My 30% internet and 20% electricity deductions were accepted without question. The Kill-A-Watt meter readings mentioned by others were gold during the audit - the agent actually complimented me on having "real data" instead of estimates. I also tracked my work hours in a basic calendar app, which helped establish my usage patterns. One thing that surprised me: the auditor said most people either claim nothing (leaving money on the table) or claim way too much (red flag). Having documented, reasonable percentages actually made me look more credible, not less. Bottom line: these are legitimate business expenses if you're truly using utilities for work. Just document your methodology and be conservative with your percentages.