Has your friend checked if there are any specific provisions for the Robinson Huron Treaty in the US-Canada tax treaty? Some indigenous rights agreements have special handling. Also, remember that state taxation is a whole separate issue from federal. Some states are more aggressive about taxing foreign income than others. Which state does your friend live in? That could make a big difference in the overall tax burden.

This is definitely a complex situation that requires careful documentation. One thing I'd add to the excellent advice already given is that your friend should request detailed documentation from the Robinson Huron Treaty settlement administrators about the specific nature and classification of the payment. The IRS will want to see clear documentation showing whether this is compensation for historical land claims, income replacement, or another type of settlement. Having this upfront documentation could save your friend from potential audit issues down the line. Also, given that he's a Canadian citizen residing in the US, he may need to consider his filing obligations in both countries. Canada might still have tax implications even if there are indigenous exemptions, and the US will definitely want their share as he's a US tax resident. I'd strongly recommend setting aside at least 25-30% of the settlement amount for taxes until he gets professional guidance. Better to be over-prepared than caught short when tax time comes around.

Quick question - has anyone used TurboTax to file with an EIDL grant? Is there a specific place where you enter this or do you just not include it as income? Don't want to mess this up!

Great question! As others have mentioned, the EIDL grant portion is generally not taxable at the federal level under Section 139 of the Internal Revenue Code. However, I want to emphasize something that's been touched on but is really important - make sure you keep detailed records of exactly how you used those grant funds. Even though the grant isn't taxable income, the IRS still wants to see proper documentation if you're ever audited. I'd recommend creating a simple spreadsheet showing the grant amount, the date received, and specifically what business expenses you paid with those funds (rent, utilities, payroll, etc.). Also, since you mentioned you're between accountants, when you do find a new one, make sure they're familiar with EIDL grant treatment. Some preparers who don't deal with small business clients regularly might not be up to speed on the current rules. Good luck with your filing!

dont get too caught up in the exact dollar amount you leave in the business. focus more on your overall profit for the year which is what actually gets taxed. i usually keep around 1 month of expenses in my s-corp account just to be safe.

Great question! I was in the exact same situation last year with my S-Corp. The $1,500 you're planning to leave in the business account is smart for covering those ongoing expenses, but as others have mentioned, it won't create any additional tax burden. One thing I learned the hard way - make sure you're also considering any quarterly estimated tax payments you might need to make early next year. Since S-Corp profits flow through to your personal return, you might owe estimated taxes on that income. I ended up having to transfer money back into the business account in January to cover some unexpected expenses, which was a pain. Also, if you haven't already, it's worth double-checking that you've documented everything properly for your basis calculation. The IRS can be pretty particular about S-Corp distributions exceeding basis, so good record-keeping is essential.

Don't forget to check if you took any loans against the policy! If you did, that complicates things. Any outstanding loans at surrender are considered part of your distribution, even though you don't actually receive that money (since the loan is satisfied when the policy is surrendered).

This thread has been incredibly helpful! I'm actually in a very similar situation - inherited a whole life policy that my uncle had been paying into for about 20 years before he passed. I was planning to just surrender it and report the full amount as taxable income, but after reading through all these comments, I realize I need to get the complete premium payment history first. The tips about using Claimyr to get through to the right department at the insurance company seem really valuable. I've been dreading dealing with customer service, but it sounds like getting to their "policy services" or "tax basis research" team makes all the difference. One question though - since I inherited this policy rather than received it as a gift while my uncle was alive, does that change how the basis is calculated? From what I understand, inherited policies get a "stepped-up basis" to fair market value at death, but I want to make sure I'm not missing anything before I surrender.

I had a similar issue last year and it turned out my firm hadn't properly designated me as an authorized user in their e-Services account. Even though my CAF was active, the firm's TDS administrator needs to specifically add you to their organization's transcript access list. Here's what worked for me: Ask your firm's e-Services administrator (usually whoever handles the firm's IRS online accounts) to log into their e-Services portal and navigate to "User Account" > "Add Authorized User." They'll need your PTIN, name exactly as it appears on your CAF, and should assign you "Transcript Delivery System" permissions. The process usually takes 1-2 business days to activate once they add you. In the meantime, you might want to verify that your individual CAF authorization is actually showing as "Active" in the system - sometimes there can be processing delays even after you receive confirmation. If your manager is unavailable, try reaching out to whoever handles the firm's IT or administrative functions. They should be able to help get you added to the system quickly.

I went through this exact same frustration about 6 months ago! The key thing that finally worked for me was realizing that there are actually TWO separate authorization steps needed for TDS access as a tax professional working for a firm. First, your individual CAF number needs to be active (which it sounds like you already have). But second, and this is the part that trips up a lot of people, your firm needs to have you listed as an authorized delegate in THEIR organizational TDS account. Here's what I'd suggest doing while your manager is out: Contact your firm's office manager or whoever handles the administrative side of things. Ask them who has "e-Services Administrator" access for your firm's IRS accounts. That person needs to log into the firm's e-Services portal and add you to their TDS user list using your PTIN. If nobody at your firm knows who the e-Services admin is, you can actually call the IRS Business and Specialty Tax Line at 1-800-829-4933 (though expect long hold times). They can tell you who the current administrator is for your firm's account. Once you're added by the admin, it usually takes 24-48 hours to show up in the system. The good news is that once it's set up properly, you'll be able to access transcripts for all clients where proper authorization forms have been filed. Don't give up - this is a super common issue for new tax pros and it's definitely solvable!