One thing to keep in mind is that you can't actually "choose" which mortgage to claim - if both properties qualify as your primary residence and second home, you're entitled to deduct the interest on both mortgages up to the applicable limits. You can't selectively ignore one to maximize the other. What you CAN do is make sure you're maximizing the deductible portions within the rules. Since your first mortgage ($550k) is grandfathered under the old $1M limit, you can deduct all the interest on that. For your new $1.3M mortgage, you'd be able to deduct interest on $750k of that loan amount. The key is making sure your total itemized deductions (including both mortgage interests, state taxes, charitable donations, etc.) exceed the standard deduction to make itemizing worthwhile. With mortgages totaling $1.85M, you'll likely have substantial interest payments that would justify itemizing.

Just to add one important consideration that hasn't been mentioned yet - make sure you understand the order of payments if you end up with a mortgage over the deduction limit. For your new $1.3M mortgage where only $750k qualifies for deductions, the IRS treats the deductible portion as being paid first throughout the year. So if you pay $91,000 in interest on that 7% mortgage ($1.3M × 7%), you'd be able to deduct interest on the first $750k of principal, which would be about $52,500 ($750k × 7%). The remaining $38,500 in interest payments wouldn't be deductible. Also, double-check that both properties will actually qualify as residences under IRS rules. The second home needs to have basic living accommodations (sleeping, cooking, and toilet facilities) and you need to use it personally for more than 14 days per year or 10% of the days it's rented out, whichever is greater. Since you mentioned using it 3 months per year, you should be fine on that front.

This is such a frustrating discovery! I went through the same thing a few years ago. The $10,000 MAGI limit for MFS Roth contributions is basically designed to be impossible for most working people to meet - it's clearly meant to push couples toward joint filing. One thing that helped me was understanding that this restriction exists because the government views marriage as creating a single economic unit for tax purposes. When you file separately, they're concerned about income shifting strategies and other tax avoidance techniques that could theoretically be used between spouses. The backdoor Roth strategy mentioned by others is definitely worth exploring if you're set on filing separately. You can contribute to a traditional IRA (no income limits for contributions, just deductibility limits) and then convert it to Roth. Just be aware of the pro-rata rule if you have other traditional IRA balances. Also consider that you have until you actually file your return to decide on your filing status - so you can calculate both ways and see which gives you the better overall result when you factor in all the various credits and deductions you'll lose or gain.

The married filing separately Roth IRA restriction is definitely one of the most frustrating aspects of the tax code! I went through this exact situation a couple years ago and felt completely blindsided by the $10,000 MAGI limit. What really helped me understand the "why" behind this rule is that it's part of a broader pattern in tax policy. The government uses the tax code not just to raise revenue, but to incentivize certain behaviors - in this case, they want married couples to file jointly because it simplifies administration and reduces opportunities for tax planning strategies that could shift income between spouses. A few practical suggestions based on my experience: 1. Run the numbers both ways (MFJ vs MFS) using tax software before you decide. Sometimes the Roth IRA limitation is offset by other benefits of filing separately. 2. If you do decide to stick with MFS, the backdoor Roth strategy really does work if you don't have existing traditional IRA balances complicating things. 3. Consider timing - you have until you file your return to choose your status, so you can explore all options. The silver lining is that this forced me to learn way more about retirement account strategies than I ever thought I'd need to know! Sometimes these tax "gotchas" end up making us better informed taxpayers in the long run.

I've been researching similar options and wanted to add a few considerations that might help. One approach I've found is looking into conservation easements - if you donate development rights on your land to a qualified organization, you can often get significant property tax reductions (sometimes 50-80% depending on the state) while still maintaining ownership and the right to live there. Another option worth exploring is homesteading exemptions, which many states offer but don't widely advertise. Texas, for example, has a homestead exemption that can reduce your taxable property value by up to $25,000 for school taxes, and some counties offer additional exemptions for veterans, seniors, or disabled individuals. Also, regarding the Alaska suggestion - while those remote parcels sound appealing, make sure you understand the access requirements. Many of these properties are only accessible by plane or boat, which can make year-round living extremely expensive and potentially dangerous during emergencies. The "no property tax" benefit might be offset by the costs of maintaining access and emergency preparedness. One more thought: if you're willing to consider a mobile lifestyle, some states like South Dakota, Texas, and Florida are popular with full-time RVers because they offer legal residency without requiring you to own property, and you can establish domicile there while traveling. This eliminates property tax entirely while maintaining US residency.

As someone who's dealt with property tax issues for years, I want to emphasize the importance of verifying any strategy with qualified professionals before implementation. While many of the suggestions here are legitimate, the devil is really in the details when it comes to tax law. A few additional points to consider: 1) **Agricultural exemptions** can be excellent but often require genuine agricultural activity - not just owning rural land. Most states require proof of income from farming/ranching or specific land management practices. 2) **Land trusts** are another option worth exploring. Some states allow you to place property in an irrevocable trust that can reduce property tax assessments, though you do give up certain ownership rights. 3) **Tax lien investing** - while not eliminating your own property taxes, you can actually profit from others' unpaid property taxes by purchasing tax liens in states that offer this investment vehicle. 4) **Religious/charitable exemptions** - if you're operating a legitimate religious organization or charity from your property, portions may qualify for exemption in many jurisdictions. Whatever route you choose, make sure you understand the long-term implications. Some strategies that eliminate property taxes may create other tax obligations or limit your property rights in ways that could be costly down the road. Always consult with both a tax attorney and CPA familiar with your specific state and local laws before making major decisions.

For documentation of revoked S elections, you'd typically find this in the corporation's tax files as Form 1120S would show the final year of S status, and there should be a Form 1120 filed for any C Corp years. However, if the records are incomplete, you can request a transcript from the IRS using Form 4506-T to get the filing history. Regarding built-in gains tracking - corporations are absolutely required to maintain this documentation per Reg. 1.1374-8, but you're right that many don't do it properly or at all. If the documentation is missing or incomplete, you'll need to reconstruct it using: - Asset records and depreciation schedules from the S election date - Appraisals if they were done at the time of election - Financial statements closest to the S election date - Any available fair market value data from that time period If you can't reasonably reconstruct the built-in gains amount, the IRS may take the position that all gains are subject to the built-in gains tax, which is obviously not favorable. This is another reason why having an experienced practitioner review is crucial - they may know alternative approaches or have dealt with similar incomplete records situations. For your original S Corp stock sale, make sure to document your research process even if you conclude Section 1374 doesn't apply. The IRS likes to see that you considered all applicable provisions, especially in complex transactions like this one.

For comprehensive guidance on S Corp stock sales with installment components, I'd recommend starting with these key IRS resources: **Primary Publications:** - Publication 537 (Installment Sales) - covers the mechanics of installment sale reporting - Publication 542 (Corporations) - has specific sections on S Corp distributions and sales - Instructions for Form 6252 - detailed guidance on installment sale reporting requirements **Critical Code Sections & Regulations:** - IRC Section 453 and related regulations for installment sales - IRC Section 1367 for S Corp basis adjustments - Reg. 1.1368-1 through 1.1368-3 for S Corp distributions and basis rules - Rev. Rul. 89-7 specifically addresses S Corp stock sales with installment features **Additional Resources:** - PLR 200927013 provides guidance on mid-year S Corp stock sales and basis calculations - TAM 200733023 covers similar issues with installment reporting One thing I haven't seen mentioned yet in this thread is the potential need for a Section 453(d) election if the selling shareholder wants to opt out of installment treatment for any portion of the sale. This might be relevant if they want to accelerate recognition of losses to offset other gains. Also, don't overlook the potential applicability of Section 1202 qualified small business stock exclusion - if this S Corp meets the requirements, the selling shareholder might be eligible for significant gain exclusion on the stock portion of the sale. The complexity of your transaction really highlights why thorough documentation and research is so critical in S Corp dispositions!

Welcome to the community! This thread has been incredibly educational - I'm new to rideshare driving and had the exact same confusion about vehicle deductions. Started driving for Uber about 2 months ago and my tax prep software was also showing that actual expenses would give me a much bigger deduction. Reading through everyone's explanations about depreciation recapture has been eye-opening. I had no idea that claiming depreciation could create tax problems later when you stop using the vehicle for business or sell it. The point about being "locked in" to actual expenses forever for that vehicle is also something I never would have considered. As a newcomer to both this community and gig driving, I really appreciate how experienced members have shared practical insights that go way beyond what you'd find in basic tax guides. The hidden complexities around depreciation recapture, record-keeping requirements, and long-term flexibility make a strong case for standard mileage, especially for those of us just starting out or driving part-time. This discussion has convinced me to go with standard mileage for my situation. Better to take the simpler, cleaner deduction and avoid potential headaches down the road. Thanks everyone for helping newcomers navigate these tricky tax decisions!

As someone who's been through this exact scenario, I want to echo what others have said about standard mileage being the right choice for your situation. I drove for Uber for about 8 months a few years back and made the mistake of choosing actual expenses because the immediate deduction looked so much better. Fast forward to when I sold my car two years later - I got hit with depreciation recapture that cost me over $1,200 in additional taxes. What seemed like a smart move to maximize my deductions ended up costing me more in the long run. For someone who only drove 4K miles over 6 months and doesn't plan to continue, you're in the perfect scenario for standard mileage. That $2,680 deduction (at $0.67/mile) is clean, straightforward, and won't create any surprises down the road. Plus, you avoid all the complex record-keeping requirements that come with actual expenses. The tax software showing actual expenses as "better" is only looking at year one. It can't predict the depreciation recapture headaches you'll face later. Trust the experienced voices in this thread - sometimes the smaller, cleaner deduction is the much smarter long-term choice. Take the standard mileage rate and sleep well knowing you won't have any tax complications when you eventually sell your 2019 vehicle!