I'm confused about something... if the client wrote checks directly to the subcontractors but asked you to deliver them, would you still need to file 1099s? Asking because I'm in a similar situation but my client wrote checks with the sub names on them, I just handed them out.

Just want to emphasize one important detail that might save you headaches - make sure you get W-9 forms from ALL your subcontractors before you pay them, not after. I made the mistake of trying to collect tax info after the job was done and some contractors had already moved on to other cities or changed phone numbers. Also, keep detailed records of everything - copies of all checks you wrote, the amounts, dates, and what work each contractor did. If you get audited, the IRS will want to see the paper trail showing these were legitimate business expenses. Since you're reporting this on Schedule C, having good documentation will help justify the deductions and show you weren't just trying to hide income. One more tip: if any of your contractors were incorporated businesses (like "ABC Roofing LLC"), you generally don't need to send them 1099s. But you still need to report the expenses on your Schedule C.

Just wondering - has anyone had issues with their refund after filing a superseding return? I'm in a situation where I'd get a bigger refund with the corrected return and wondering if it complicates or delays things?

I went through this exact same situation two years ago and can confirm what others have said about the process. One thing I'd add that saved me a lot of stress - when you write "SUPERSEDING RETURN" at the top, use a red pen or marker if you're mailing it in. It makes it much more visible to the processors. Also, keep copies of EVERYTHING. I mean your original return, the superseding return, all your supporting docs, and even the envelope you mail it in (take a photo). The IRS processed mine correctly, but having all that documentation gave me peace of mind. One more tip - if you're close to the deadline, send it certified mail with a return receipt. That way you have proof it was delivered before April 15th, which is crucial since superseding returns must be filed by the original deadline.

As someone who just went through this exact same maze of confusion last tax season, I completely feel your pain! The cost basis calculations for multiple stock purchases can be absolutely overwhelming, especially when your broker doesn't provide the basis information. Your Amazon example is spot-on with the FIFO calculation - you're correct that it would be $1,235 cost basis ($650 for the first 5 shares + $585 for 3 of the second batch). Unfortunately, as others have mentioned, you can't choose the method that gives you lower taxes after the fact. Since you didn't specify which shares to sell at the time of the transaction, you're stuck with FIFO. One thing that saved my sanity was creating a simple "lot tracking" spreadsheet with columns for Purchase Date, Shares, Price Per Share, and Total Cost. When I sold shares, I just worked from the oldest purchases down until I accounted for all shares sold. This visual approach made the FIFO method much clearer than trying to do it all in my head. Also, definitely double-check your broker's online portal for additional transaction details that might not be on your printed 1099-B - I found dividend reinvestment records there that I had completely missed initially. Those small DRIP transactions can really add up and significantly impact your cost basis calculations. The manual process is painful but educational. Next year, consider setting up specific identification with your broker if you want more control over tax optimization. Hang in there - it gets much easier once you establish a good tracking system!

As a newcomer to this community and investment taxes in general, I wanted to thank everyone for this incredibly detailed and helpful discussion! I'm in almost the exact same situation as Carter - first time dealing with stock transactions on my taxes and completely confused about cost basis calculations. The clarification that FIFO is mandatory for individual stocks (unless you specified shares at sale time) was crucial for me to understand. I had been hoping I could just pick whichever method gave me lower taxes, but now I see why that's not allowed. What I find most valuable about this thread is how many different approaches and tools have been shared - from manual spreadsheet tracking to automated platforms like taxr.ai, to professional CPA review services. It gives newcomers like me options based on our comfort level and complexity of our situations. I'm planning to follow the systematic approach several people recommended: start with the manual Publication 550 method to learn the fundamentals, then use an automated tool to verify my calculations. The emphasis on downloading complete transaction histories (including those easy-to-miss dividend reinvestments) before starting seems absolutely critical. One question for the group: for someone with about 15-20 stock transactions in their first year, would you still recommend the manual approach first, or at that volume should I jump straight to one of the automated tools to avoid potential calculation errors? I'm reasonably comfortable with spreadsheets but definitely want to get this right. Thanks again to this amazing community for sharing such detailed experiences and practical advice!

Has anyone dealt with a situation where the deceased owner hadn't been taking depreciation properly before death? My uncle passed and left me his rental property, but I discovered he hadn't claimed depreciation for 3 years even though he should have. Does the step-up basis just make all that irrelevant now?

Great question about the depreciation situation! I went through something very similar when my grandmother passed and left me her duplex. She had also missed claiming depreciation for several years before her death. The good news is that @Libby Hassan and @Eva St. Cyr are absolutely right - the step-up in basis at death essentially gives you a clean slate. All the missed depreciation from before becomes irrelevant because you're starting with a fresh basis equal to the fair market value at the date of death. One thing I'd add is that you might want to consider filing an amended return for your uncle's estate if the missed depreciation deductions were significant. While it doesn't affect your stepped-up basis, it could result in refunds for the estate that the beneficiaries would receive. My CPA helped us recover about $4,200 in missed deductions from my grandmother's final three years. Also, make sure to start your depreciation schedule immediately once you inherit - don't repeat your uncle's mistake! The IRS expects you to claim depreciation whether you actually take it or not, so there's no benefit to skipping it.

This thread has been absolutely invaluable! I'm dealing with a very similar situation where my parents are considering moving into our mountain cabin full-time after retirement. Reading through all these detailed responses has helped me understand the gift tax implications much better than the confusing articles I found online. A few key takeaways that have been most helpful: the gift splitting between spouses to effectively double the annual exclusion, using annual average rental rates for seasonal properties, and the importance of proper documentation without overcomplicating things. I hadn't considered the insurance and property tax angles at all, so those insights alone probably saved me from future headaches. One question I still have - for those who mentioned creating family agreements, did you include any provisions about what happens if circumstances change? For example, what if health issues require your parents to move to assisted living, or if family financial situations change and you need to sell the property? I want to make sure we're thinking ahead about potential scenarios while keeping the agreement simple and family-friendly. Also, the seasonal rental calculation approach mentioned by several people makes perfect sense for our area. Our mountain location has significantly higher winter ski season rates, so using an annual average will give us a much more reasonable and defensible gift value calculation. Thank you to everyone who shared their real-world experiences and resources - this is exactly the kind of practical guidance that's impossible to find elsewhere!

This has been an incredibly thorough and enlightening discussion! As someone who's been considering a similar arrangement with my elderly parents and our lake property, I can't thank everyone enough for sharing their real-world experiences and insights. The breakdown of gift tax calculations, especially the gift splitting between spouses and how to handle seasonal rental variations, has made what seemed like an overwhelming tax situation much more manageable. I particularly appreciate the practical tips about documentation - creating a simple family agreement rather than overcomplicating things with formal leases, while still maintaining proper records for tax purposes. A couple of questions I have after reading through everything: For those who went through the insurance policy changes when parents moved in full-time, how much notice did your insurance companies require? I want to make sure I'm not accidentally creating a coverage gap during the transition. Also, I'm curious about the property tax benefits mentioned. If my parents establish the lake house as their primary residence, do they need to formally change their voter registration and other official addresses, or is it sufficient for tax purposes if they just live there most of the time? The resources mentioned (taxr.ai for tax analysis and Claimyr for IRS contact) seem like they could save a lot of time and stress. It's reassuring to see multiple people had positive experiences with these tools for navigating what initially seemed like a complex situation. Thanks again to everyone for creating such a comprehensive resource - this discussion has been more helpful than hours of internet research!