One thing nobody mentioned yet - if you're frequently buying and selling gift cards (like as a side hustle), the IRS might consider that a business activity rather than just selling personal items. In that case, different rules would apply. But for your situation with just accumulated personal gift cards, I wouldn't worry about it. I sell unwanted gift cards every year and have never reported it since I'm always selling at a discount from face value.

If your gift cards were received as gifts (not as payment for services or work bonuses), selling them for less than face value is basically a personal loss. I'm not a tax professional, but I've been in the US on a work visa for 6 years and have done this many times. Think of it like selling a used item from your home - if you sell your used TV for less than you paid for it, you don't report that as income. Same concept applies here.

Quick question - does a legal separation need to be finalized before tax time to affect your filing status? My wife moved out in December and we're getting separation paperwork started but it won't be done before April.

I went through something very similar last year when my husband and I separated but hadn't finalized our divorce yet. Since you're still legally married as of December 31st, you can only file as married filing jointly or married filing separately - not single or head of household. Given that your finances are completely separate now and you're concerned she might file jointly without telling you, I'd strongly recommend married filing separately. This protects you from being liable for any tax issues on her side, and since you mentioned you're not communicating much, it eliminates the need to coordinate your filing. The downside is you'll likely pay more in taxes than if you filed jointly, but the peace of mind is usually worth it during separation. Since you're paying the mortgage alone even though her name is still on the house, make sure you can still claim the mortgage interest deduction - you should be able to since you're the one actually making the payments. You might want to consult with a tax professional who can run the numbers for both scenarios and show you exactly what the difference would be in your specific situation.

This thread has been absolutely incredible for understanding these complex capital gains rules! I'm in a very similar situation - owned a property for 16 years, lived in it as primary residence for 12 years, then rented it out for 4 years before selling recently. Like so many others here, I was initially using the proportional calculation (12/16 = 75% exclusion) and was prepared to pay a substantial tax bill. But after reading through everyone's experiences and explanations, I'm realizing I may qualify for the full exclusion minus depreciation recapture! I claimed about $24k in depreciation over those 4 rental years, so if I understand correctly, I'd only owe the 25% recapture tax on that amount (roughly $6k) rather than the much larger sum I was expecting based on my original calculation. What's really struck me is how many people in this thread discovered they had overpaid or were planning to overpay because of misunderstanding these rules. It really highlights how non-intuitive tax law can be, even for situations that seem straightforward on the surface. I'm definitely going to look into some of the tools and services mentioned here to get professional confirmation before filing. With the amounts involved, it's worth the peace of mind to make sure I'm applying these rules correctly. Thank you to everyone who shared their knowledge and real-world experiences - this community discussion has been more valuable than any tax guide I've tried to read!

This thread has been incredibly helpful! I'm in a somewhat different situation and hoping someone can shed some light on it. I owned a duplex for 20 years - lived in one unit as my primary residence for the first 15 years while renting out the other unit, then moved out and rented both units for the last 5 years before selling. I'm trying to figure out how the capital gains exclusion applies when only part of the property was my primary residence. From what I've read here, it sounds like the 5 years of renting both units after I moved out wouldn't count as "non-qualified use" for the portion that was my primary residence, but I'm not sure how to calculate the split. The total gain on the sale was about $200k. I claimed depreciation on the rental unit throughout the entire 20 years (about $45k total) and on my former residence unit for the last 5 years (about $15k). Would I be able to exclude 50% of the gain (since half the property was my primary residence) and then pay recapture tax on the full $60k in depreciation? Or is it more complicated than that with mixed-use properties? Has anyone dealt with a duplex or similar situation where part of the property was always rental and part was converted from primary residence to rental? Would really appreciate any insights!

I feel obligated to mention a cautionary note regarding verification timelines. Per Internal Revenue Manual 21.9.1.3, identity verification should be processed within 9 weeks, but I've observed numerous cases where this timeline was exceeded without notification to the taxpayer. In one particularly concerning case from last tax season, a client submitted verification on February 3rd and received no updates until May 27th - nearly 16 weeks later. The IRS cited "exceptional processing circumstances" but provided no further explanation. According to Taxpayer Advocate Service Report 2023-1, approximately 18% of verification cases exceed standard processing times. I strongly recommend documenting all verification submission dates and following up proactively if the 9-week mark passes without resolution.

Thank you for sharing your timeline, Diego! As a fellow military family member, I completely understand the frustration of waiting on government processes. From what I've been reading in various tax forums and based on conversations with others who've gone through ID verification this season, your February 17th submission date puts you right in the thick of peak verification season. The IRS verification department seems to be processing in waves, and many people who submitted in mid-to-late February are just now starting to see movement. I'd suggest checking your online account transcript (if you haven't set one up yet) rather than relying solely on WMR - it tends to update faster and gives you more detailed information about where your return stands in the process. From what I've observed, once verification clears, the actual refund processing moves pretty quickly. Hoping you see some positive movement soon!

I may have some relevant information to share. My verification was completed on February 20th, and I received my refund on March 8th, which was approximately 16 days later. It seems the timeframe might be somewhat consistent based on what others have shared here. I checked my transcript every few days and noticed the 846 code appeared about 3 days before the deposit hit my account. I believe the system follows a fairly standard process unless there are additional complications with your return.

Based on everyone's experiences here, it looks like you're right in the normal timeframe window. I completed ID verification on February 25th and got my refund on March 15th - exactly 18 days later. The key thing I learned is that patience is really your only option during this phase. The IRS systems seem to process post-verification returns in batches, which explains why some people get theirs in 9 days while others wait the full 21. Since you're at day 15 and documented everything so well, I'd suggest checking your transcript one more time for any new codes, then waiting about 5-6 more days before calling. The fact that you completed verification online and got confirmation is a good sign - it means you're definitely in the queue.