I had a very similar experience with AMC around the same time period! Lost about $500 on that investment after the reverse split mess. One thing I learned that might help others reading this thread: make sure to keep screenshots or printed copies of your original trade confirmations, especially for meme stocks that went through corporate actions. I almost lost my documentation when my old brokerage account got closed, and those records ended up being crucial when the IRS questioned my cost basis calculation during a random review. Also, for anyone dealing with multiple reverse splits or other corporate actions, I found it helpful to create a simple spreadsheet tracking the original purchase price, number of shares, split ratios, and final sale details. It makes the math much clearer when you're doing your taxes and gives you a clean paper trail if needed. The $602 loss you calculated is definitely correct based on what you described. At least we can take some comfort in knowing these losses help reduce our tax burden!

I went through a very similar AMC situation and can confirm what others have said - your $602 loss calculation is absolutely correct. The reverse split doesn't change your total investment amount, just the number of shares and per-share basis. One thing that helped me was calling my broker (Schwab) directly to verify the cost basis on my 1099-B was calculated correctly after the split. They walked me through exactly how they adjusted the numbers, and it matched my own records perfectly. Most major brokers handle these corporate actions properly now, but it's worth a quick verification call if you're unsure. The good news is that $602 short-term capital loss will definitely help offset other gains or reduce your taxable income. I know it stings losing money on what seemed like a "sure thing" at the time, but at least the tax benefit softens the blow a bit. Lesson learned about doing our own research instead of taking family stock tips!

I've been through both state and federal audits and can share some insights. While they're not directly linked, there is information sharing between agencies through programs like the Federal/State Exchange Program. The IRS uses their own Discriminant Function System (DIF) to select returns for audit, which considers multiple factors beyond state audit results. That said, if your state audit reveals significant unreported income or suspicious patterns, it could increase your federal audit risk. My recommendation: treat your state audit seriously, maintain organized records, and respond promptly to all requests. Most importantly, if they find any errors, make sure you also file amended federal returns if needed - being proactive shows good faith and can actually reduce your audit risk. The majority of state audits result in minor adjustments or no changes at all, so try not to stress too much!

Been through this exact scenario! Had a state audit in 2021 and was terrified the IRS would follow up. What I learned is that while there's no automatic trigger, the agencies do share information through data matching programs. The good news is that most state audits are pretty routine - mine was just about some deduction documentation and got resolved in about 6 weeks with no issues. My CPA told me the IRS typically only gets interested if there are major discrepancies in income reporting or patterns that suggest tax avoidance. Keep your paperwork organized, respond to everything promptly, and try not to let the anxiety eat you alive (easier said than done, I know!). In most cases, you handle the state audit and that's the end of it. Hang in there!

I'm dealing with a similar situation right now with our LLC dissolution. One thing that's been crucial is making sure you have proper documentation for the loans versus capital contributions distinction. The IRS scrutinizes this heavily during partnership audits. For Mike's situation, if the loans were truly loans (not disguised capital contributions), he should be able to claim a business bad debt deduction when it becomes clear the partnership can't repay. The key is proving there was a genuine debtor-creditor relationship with expectation of repayment. A few practical tips from my experience: 1) Get written confirmation from your accountant that the business is insolvent and unable to pay its debts, 2) Document any collection efforts made (even if unsuccessful), and 3) Make sure the loans were consistently treated as debt on your books throughout the partnership's existence. The timing of the bad debt deduction is also important - it should be claimed in the tax year when the debt becomes worthless, which might be before you file the final 1065 if insolvency is already established.

I'm currently going through a similar partnership dissolution and wanted to share some insights about the partnership's side of this equation. While everyone's focused on Mike's bad debt deduction (which is correct), don't forget that the partnership itself may need to report cancellation of debt income if the loans are forgiven. However, since you mentioned the partnership is insolvent, you'll likely qualify for the insolvency exclusion under IRC Section 108. This means the partnership won't owe tax on the forgiven debt as long as you can demonstrate that total liabilities exceeded total assets immediately before the debt cancellation. You'll need to file Form 982 with your final 1065 to claim this exclusion. Make sure to prepare a balance sheet showing the partnership's insolvency - this documentation will be crucial if the IRS questions the exclusion. The timing matters too: the insolvency test is applied immediately before each debt cancellation, so if you're forgiving multiple partner loans, document the financial position before each forgiveness. This is often overlooked in partnership dissolutions, but getting it wrong can result in unexpected tax liability for the partnership even when it has no assets to pay with.

I've been following your situation closely and wanted to share some additional support as you head into your Thursday meeting! As a fellow government employee who's dealt with FSA complications, I think you've built an incredibly strong case. One thing that really stands out to me is how methodically you've approached this after getting initial advice from the community. The combination of your 5-year employment history, your husband's continued employment, the timing of your expenses (all incurred before departure), and the apparent communication gap around deadline changes gives you multiple strong angles to work with. I'm particularly impressed with how you've evolved your framing from "asking for a favor" to "requesting a plan administration review." That professional approach, combined with your specific requests for documentation (like the Summary Plan Description) shows you understand the process and aren't just making an emotional appeal. The regulatory angles about ERISA requirements for "reasonable notice" that others have mentioned could be game-changing if your employer can't document clear communication about the deadline change. And the fact that your family maintained good faith participation through your husband's FSA really demonstrates you weren't trying to circumvent any rules. You've clearly absorbed all the best advice from this thread and turned it into a comprehensive strategy. Really rooting for you to get a positive outcome on Thursday! This whole discussion has been educational for all of us - thank you for sharing your situation and being so open to the community's input.

This has been such an educational thread to follow! As someone who handles FSA administration, I want to emphasize a few key points that could really strengthen your position going into Thursday's meeting. First, the fact that you're approaching this as a "plan administration review" rather than a personal favor request is absolutely the right strategy. This frames it as a compliance and procedural matter, which is exactly how HR and benefits administrators need to think about these situations. Second, your documentation approach is spot-on. Having those daycare receipts showing all expenses were incurred before your April departure is crucial - it proves you were using the benefit exactly as intended during your active employment period. The communication gap around deadline changes is equally important, especially given the ERISA requirements others have mentioned. One additional suggestion: when you request the Summary Plan Description, also ask for any "Procedures Manual" or "Administrative Guidelines" they might have. Sometimes the most flexible language around exceptions and discretionary decisions is found in these supplementary documents rather than the main SPD. Your 5-year employment history combined with your husband's continued employment there creates a really compelling case for maintaining good employee relations. Most companies understand that these situations genuinely happen and want to preserve relationships with long-term employee families. The regulatory backing around "reasonable notice" requirements gives you legitimate grounds to question whether proper procedures were followed during your termination process. This isn't about asking for special treatment - it's about ensuring the plan was administered correctly. Really hoping you get great news on Thursday! You've built such a strong, well-documented case that addresses both the procedural and relationship aspects. Keep us posted!

I've been handling roommate payments through Venmo and Cash App for the past three years, and I can definitely put your mind at ease about this situation! The key thing to understand is that you're receiving reimbursements, not income. When your roommates pay you their share of rent and utilities, they're simply repaying you for expenses you covered on their behalf. Since you're not making any profit or charging above actual costs, there's nothing taxable about these transactions. Here are some practical tips that have worked well for me: **Documentation**: Keep a simple record of your monthly bills and how much each person owes. I use a basic spreadsheet that takes maybe 2 minutes to update each month. Also save copies of your lease and utility bills. **Payment app setup**: Make sure your roommates categorize payments as "friends/family" or "personal" rather than "goods/services." Have them include clear notes like "March rent" or "utilities" in the memo lines. **Stay within reimbursement bounds**: As long as you're only collecting their actual share of expenses without any markup, you're clearly in legitimate reimbursement territory. The $600 payment app reporting threshold that has everyone worried only applies to business transactions anyway. Personal reimbursements between roommates don't fall under those rules at all. Your situation is completely normal - you're just the person whose name happens to be on the lease, collecting everyone's fair share of living expenses. Don't let the tax anxiety stress you out over something that's perfectly legitimate!

I've been in a very similar roommate payment situation for the past 18 months, and I completely understand your anxiety about this! The good news is that you're worrying about something that really isn't an issue. When your roommates send you money through payment apps for their share of rent and utilities, you're receiving reimbursements, not taxable income. The IRS distinguishes between money you earn (which is taxable) and money that simply repays you for expenses you covered on behalf of others (which is not taxable). Since you're only collecting their actual share of living costs without any markup or profit, this falls squarely into the reimbursement category. Here's what I do to keep everything clean and documented: **Simple record-keeping**: I maintain a basic monthly spreadsheet showing our total rent/utilities and each person's share. Takes about 3 minutes per month but gives me complete peace of mind. I also keep copies of our lease and utility bills. **Payment app best practices**: I ask my roommates to always categorize payments as "friends/family" or "personal" (never "goods/services") and to include clear memos like "April rent share" or "March utilities." This creates an obvious paper trail showing these are legitimate expense reimbursements. **Stay within reimbursement bounds**: As long as you're not charging any fees or markups above actual costs, you're clearly just splitting shared living expenses. The new $600 payment app reporting rules everyone talks about only apply to business transactions marked as "goods/services" anyway. Your situation is a textbook example of legitimate roommate expense sharing - exactly what these reporting rules are NOT targeting. You're handling a completely normal living arrangement in the most straightforward way possible. Keep basic records for your own peace of mind, but don't stress about the tax implications!