I messed up my foreign tax credit last year and had to amend my return. Anyone have experience with how long it takes the IRS to process an amended return with Form 1116? I'm still waiting after 3 months...

Just wanted to add some clarity on the $300 threshold that's been mentioned - this is specifically for the "de minimis" rule under IRC Section 904(j). You can elect to claim foreign taxes as a deduction instead of a credit if you're under this threshold, OR you can still choose to claim them as a credit on Schedule 3 without filing Form 1116. One thing to watch out for though - if you have foreign taxes from sources like foreign mutual funds or PFICs (Passive Foreign Investment Companies), those have different rules and may require Form 1116 regardless of the amount. Most regular brokerage dividends from foreign stocks won't fall into this category, but it's worth double-checking your investment statements. Also, if you're planning to carry forward any excess foreign tax credits to future years, you'll need to file Form 1116 even if you're under the threshold, since the simplified method doesn't allow for carryforwards.

Make sure u also consider what happens with state taxes! Some states follow federal MFS rules but others dont. We almost messed this up cuz our state (Oregon) had different rules for MFS filers selling a home than the federal govt does.

I went through this exact situation last year and want to share what I learned. The key thing is to make sure you're splitting based on actual ownership, not just convenience. Since you mentioned the deed has both your names and you're in Florida (non-community property state), you'll each report 50% of the sale. One thing that caught me off guard was tracking down all the documentation for basis adjustments. Keep receipts for any major improvements you made - new roof, HVAC system, kitchen remodel, etc. These increase your basis and reduce your taxable gain. I found old receipts in my files that saved us about $15,000 in reportable gain. Also, don't forget about selling expenses like realtor commissions, title insurance, and closing costs - these reduce your proceeds and lower your gain. Each of you can deduct 50% of these costs on your respective returns. The $250,000 exclusion per person when filing separately is usually more than enough for most people, but make sure you both meet the 2-out-of-5-years residency test independently. Good luck!

I'm sort of in a similar situation, I think? My tax preparer might have misspelled my last name (I have a somewhat unusual surname that people often get wrong). Should I be worried about potential identity theft issues if the name doesn't match exactly? I'm a bit concerned that this could possibly trigger some kind of fraud alert or something in the IRS system...

I work as a tax professional and see name issues frequently. The good news is that minor name discrepancies rarely trigger fraud alerts - the IRS system is sophisticated enough to distinguish between simple errors and actual identity theft attempts. Your SSN is the primary matching key, and they look at patterns across multiple data points. A misspelled surname with all other information matching correctly would typically just result in a processing delay, not a fraud investigation. However, if you're concerned, you can proactively call the IRS at 1-800-829-1040 to explain the situation, or wait to see if you receive any correspondence. Most of these issues resolve automatically during processing without any action needed from you.

Thanks for this detailed breakdown everyone! As someone who's been considering MLPs for the income, this thread has been incredibly eye-opening. I had no idea about the multi-state filing requirements or the FATCA reporting issues. One question I haven't seen addressed - for someone just starting out with maybe $10K-15K in MLP investments, are these complications worth worrying about? It sounds like some of the worst issues (multi-state filings, foreign reporting) might not apply at smaller investment levels due to thresholds. Also, has anyone tried holding MLPs in a taxable account versus tax-advantaged accounts? I know @Lukas mentioned the UBTI issue with retirement accounts, but I'm curious if there are any other considerations for account placement strategy. The late K-1 timing issue alone might be a dealbreaker for me since I usually file early to get my refund quickly. Appreciate everyone sharing their real-world experiences!

As someone who's been dealing with MLPs for about 8 years now, I wanted to add a few practical tips that might help newcomers avoid some common pitfalls: **Timing Strategy**: I've learned to file extensions every year now. Rather than stress about late K-1s, I just plan for it. This gives me time to properly review everything instead of rushing, and honestly, the peace of mind is worth delaying my refund by a few months. **Record Keeping**: Create a dedicated folder (physical or digital) for each MLP from day one. Store your purchase confirmations, all K-1s, and keep a running basis calculation spreadsheet. I can't stress this enough - trying to reconstruct this information years later when you sell is a nightmare. **Software Considerations**: While TurboTax and similar programs can handle basic MLP reporting, they often struggle with complex situations like amendments or multiple MLPs. If you're planning to hold several MLPs long-term, budget for professional tax prep or invest in more robust software. **Exit Strategy**: Before you buy, have a plan for selling. The basis calculations get more complex each year, and if you're not tracking properly, you might end up paying more in taxes than necessary when you eventually sell. The income from MLPs can be attractive, but make sure you're factoring in the additional complexity and potential professional tax prep costs when calculating your real returns.

Just FYI - these abbreviations can matter at tax time! My friend had "ABS PAY" that turned out to be disability payments which are taxed differently depending on who paid the premiums. Might be worth checking if this affects your W-2 reporting for next year. Some absence pay types impact your Social Security wages box on your W-2.

Great question! I've seen this come up a lot. "ABS PAY" almost always stands for "Absence Pay" - it's how many payroll systems track compensation for time when you're not physically at work but still getting paid (sick days, bereavement leave, jury duty, etc.). The reason it shows up separately from your regular hours is for accounting and compliance purposes. Your employer needs to track different types of paid time off for things like FMLA reporting, state leave requirements, and budget allocation between departments. Since you mentioned being out with a stomach bug, that's likely what triggered the ABS PAY entries. Even though you thought you were using regular PTO, your company might categorize sick time differently from vacation time in their payroll system. This is pretty common and nothing to worry about - it's still regular taxable income that will show up normally on your W-2.