I'm surprised nobody has mentioned the potential for basis adjustment due to the "kiddie tax" that might have applied while the shares were in the UGMA account. If the custodial account generated dividends or other income that exceeded certain thresholds while you were a minor, there could be implications for your basis calculation. Also, don't forget to check if there were any return of capital distributions over the years that would have reduced your basis. With shares held this long, it's surprisingly common.

This is exactly the type of complex situation where getting professional help makes sense. Between the original employee stock options, the UGMA transfer, multiple corporate actions (two mergers!), and decades of potential dividend reinvestments, you're dealing with a multi-layered basis calculation that could easily result in overpaying taxes if handled incorrectly. A few additional things to consider that others haven't mentioned: 1. Check if your brokerage has any historical records from when the shares were transferred in 2018. Sometimes they capture basis information from custodial accounts even if it's not immediately visible. 2. Contact the current company's investor relations department - they often maintain historical information about corporate actions, stock splits, and merger terms going back decades. This documentation will be crucial for your basis calculations. 3. If your father still has any old tax returns from around 1992 when he exercised the options, those might show the income he recognized, which would help establish his original basis. 4. Don't overlook state tax implications - some states have different rules for gift basis than federal tax law. Given the potential tax savings involved with shares held for 30+ years, it's probably worth investing in proper documentation and calculation rather than guessing. The IRS is pretty strict about substantiating basis claims, especially on large gains from old securities.

another thing to know - the state CAN eventually get your federal refund through the Treasury Offset Program but it usually takes MONTHS before they refer your debt to that program. you'll get multiple notices before that happens. also each state has different rules about when they can use TOP. if your trying to avoid them taking your federal refund, you should call the state ASAP and work out a payment plan. once you have a plan and make your first payment they usually stop collection attempts including bank levies.

I was in almost the exact same situation last year - owed about $2,400 to my state and was panicking about my federal refund getting taken. The short answer is that your federal refund should be safe for now, but you definitely want to act quickly. Here's what I learned: States and the IRS are completely separate systems, so they can't just automatically grab your federal refund. However, if your state debt goes unpaid for too long (usually many months), they can eventually refer it to the Treasury Offset Program, which COULD intercept your future federal refunds. The key is to call your state tax department immediately and set up a payment plan. Once you're on a payment plan and making payments, they typically stop all collection activities including bank levies and won't refer your debt to the offset program. Most states are pretty reasonable about payment plans if you're proactive about calling them. Don't wait - the sooner you call, the more options you'll have and the less stressed you'll be about your federal refund.

This is exactly the kind of situation that catches people off guard! I work in tax preparation and see this come up more often now with increased flight disruptions. Your $2,000 cash compensation is definitely taxable income that needs to be reported. A few practical tips from what I've seen: 1. You'll likely receive a 1099-MISC from the airline since it's over $600 - keep an eye out for it in January/February 2. Report it as "Other Income" on Schedule 1, line 8z of your tax return 3. Set aside about 22-24% of the $2,000 for taxes (so around $440-480) since it will be taxed at your marginal rate 4. Keep all documentation from the airline - the original compensation letter, any emails, etc. The timing works in your favor though - since you received it in 2024, you have until you file your 2024 taxes (early 2025) to prepare for the tax impact. Don't make the mistake of spending it all and being surprised by the tax bill later! One silver lining: if you had any unreimbursed expenses related to the delay (meals, hotel if you had to stay overnight), those might offset some of the tax burden depending on your situation.

This has been such an informative thread! I'm dealing with a similar situation but with a twist - I got bumped from an international flight and received compensation in Euros (about €1,800, which was roughly $1,950 USD at the time). Does anyone know how currency exchange affects the tax reporting? Do I report the USD equivalent value from the day I received it, or do I need to use some other exchange rate? Also, since it was an EU airline operating under different compensation rules, I'm wondering if that changes anything from a US tax perspective. The compensation was required by EU law rather than voluntary like most US airline situations. I assume I still need to report it as taxable income regardless of the foreign regulations that required the payment, but wanted to double-check before filing. Has anyone dealt with foreign airline compensation before?

This is a common area of confusion for traveling consultants! The key principle is that per diem covers YOUR personal meals only. Here's how I handle it based on my CPA's guidance: When traveling and using per diem: - Per diem covers all YOUR meals for that travel day - If you buy meals for CLIENTS/CONTRACTORS as part of business discussions, their portion can be a separate business expense (not your portion) - Document who attended, business purpose, and keep receipts For your crew meals where you don't eat with them - if it's truly for business purposes (team meetings, morale for productivity, etc.), this could qualify as a separate business expense since it's not covering your personal meal. Local client meetings when not traveling are indeed 50% deductible business meals. The IRS looks at substance over form - are you legitimately incurring business expenses beyond your personal sustenance? Document everything with dates, attendees, business purpose, and amounts. When in doubt, separate your personal meal costs (covered by per diem) from costs incurred for business purposes with others. I'd recommend getting this reviewed by a tax professional familiar with your specific situation to ensure compliance.

Great question! I've dealt with similar confusion as a traveling consultant. Based on my experience and discussions with my tax preparer, here's what I've learned: When you're on travel status using per diem, that rate covers ALL of your personal meals for that day - breakfast, lunch, and dinner. You can't also deduct your portion of business meals on those same days. However, if you're paying for CLIENT meals during business discussions while traveling, the clients' portions can potentially be deducted as separate business expenses. The key is documentation - you need to clearly show the business purpose, who attended, and ideally break down costs so it's clear you're not double-dipping on your own meal. For buying food for your crew when you don't eat with them - this could qualify as a business expense if there's a legitimate business purpose (team meetings, boosting morale for productivity, etc.). Again, documentation is crucial. Your understanding about local client meetings is correct - when you're not traveling, those are typically 50% deductible business meals. One thing that's helped me is keeping a simple spreadsheet tracking: - Travel days (per diem only) - Client entertainment expenses (separate from per diem) - Local business meals (when not traveling) This makes it much easier come tax time and helps ensure you're not accidentally claiming the same expense twice. Definitely worth having a tax pro review your specific situation!

I went through this exact thing with my consulting business last year. The UK subsidiary ended up being its own corporation that paid UK taxes, but we still had to deal with US tax implications. The most annoying part was filling out Form 5471 - it's super complicated and the penalties for doing it wrong are insane (like $10k+ per form)!

This is exactly the kind of complex international tax situation where getting professional help early can save you thousands down the road. Based on what others have shared here, it sounds like your uncle and aunt will definitely need to understand CFC rules, Form 5471 requirements, and how the US-UK tax treaty applies to their specific situation. One thing I'd add is to consider the timing of when they set up the UK subsidiary. If they're expecting losses in the first year or two (which is common with international expansion), the branch vs subsidiary decision becomes even more important for tax planning. With a branch, those UK losses might be deductible against US income immediately, while with a subsidiary they'd be trapped until the subsidiary becomes profitable. Also, make sure they understand the compliance deadlines - some of these international forms have earlier due dates than regular corporate returns, and the penalties for missing them are brutal. The IRS takes foreign reporting requirements very seriously.