Don't forget to also check if what you're selling is actually taxable in each state. For example, clothing is tax-exempt in some states but taxable in others. Digital products have their own weird rules too. The nexus threshold isn't the only thing to consider...

Great question! You're mostly correct about economic nexus thresholds - staying under $100k in sales or 200 transactions typically means you don't need to collect sales tax in most states. However, there are a few important things to keep in mind: 1. **Home state physical nexus**: You'll still need to collect sales tax for customers in your home state regardless of your sales volume, since you have physical presence there. 2. **Etsy handles most of it**: Since you're selling on Etsy, they actually collect and remit sales tax for you in most states under marketplace facilitator laws. This is a huge advantage and simplifies things significantly. 3. **Keep records**: Even though you're under the thresholds now, it's good practice to track your sales by state so you'll know when you're approaching any limits if your business grows. 4. **Product taxability**: Handmade jewelry is generally taxable, but it's worth double-checking your specific state's rules since some have exemptions for certain handcrafted items. At your expected sales volume of $2,500-3,000, you're definitely safe from economic nexus in other states. Just make sure you understand your home state's requirements for small sellers - some states have minimum thresholds or simplified processes for micro-businesses.

One additional strategy worth considering is income smoothing through installment sales if you're planning to sell a large portion of your RSUs. While this doesn't work for publicly traded stocks immediately after IPO, if you're considering selling to a private buyer or in certain structured transactions, installment treatment can spread the tax impact over multiple years. Also, don't overlook the Net Investment Income Tax (NIIT) - that additional 3.8% tax kicks in at $200K for single filers or $250K for married filing jointly. If your RSU sales combined with other income push you over these thresholds, it's another factor to consider in your timing strategy. For those with significant RSU positions, it might also be worth exploring tax-efficient index fund investing with your other assets. If you're going to be heavily concentrated in your company stock post-IPO, you can use tax-loss harvesting on a diversified portfolio to generate losses that offset some of your RSU gains. One more thing - if you're planning any major life changes (marriage, divorce, having children) around the time of your IPO, the timing of these events relative to your stock sales can have significant tax implications due to filing status and dependent changes.

Great comprehensive discussion here! I wanted to add a few additional considerations that might be helpful for your pre-IPO RSU planning: **Roth IRA Conversions**: If you expect to be in a higher tax bracket post-IPO, consider doing Roth IRA conversions now while you're in a lower bracket. You'll pay taxes on the conversion at today's rates, but future growth and withdrawals will be tax-free. This is especially powerful if you can use some of your future RSU proceeds to fund retirement. **Section 83(b) Elections**: While this typically applies to early-stage restricted stock rather than RSUs, if your company offers any opportunity to exchange RSUs for restricted stock before IPO, the 83(b) election could potentially save significant taxes by locking in today's (presumably lower) valuation for tax purposes. **Consider AMT implications**: If you have any incentive stock options (ISOs) in addition to RSUs, be careful about triggering Alternative Minimum Tax. The timing of your RSU sales relative to ISO exercises could impact your overall tax efficiency. **International tax considerations**: If you have any foreign accounts or investments, or if you're planning to move internationally, FATCA reporting requirements and foreign tax credits can add complexity to your post-IPO tax situation. The key is starting this planning now rather than waiting until after the IPO when your options become more limited. Having multiple strategies in your toolkit gives you flexibility to adapt based on the actual IPO price and market conditions.

I understand your frustration - trust taxation can be incredibly confusing, and it sounds like there may have been some miscommunication about the specific benefits your irrevocable trust provides. The general rule is that irrevocable trusts DO pay capital gains taxes when property is sold, using the same basis (original purchase price plus improvements) that you had when you transferred the property into the trust. However, there are several important nuances that might explain the confusion: 1. **Estate Tax vs. Income Tax Benefits**: Your attorney was likely correct about the estate tax advantages - irrevocable trusts remove assets from your taxable estate, which can save significant money in estate taxes for larger estates. 2. **Grantor Trust Rules**: Some irrevocable trusts are still considered "grantor trusts" for income tax purposes, which means the tax consequences flow through to you personally rather than being taxed at the trust level. 3. **Special Trust Types**: Certain specialized trusts like Charitable Remainder Trusts (CRTs) or Qualified Personal Residence Trusts (QPRTs) have different capital gains treatment. My recommendation would be to: - Review your trust documents carefully to identify the exact type of trust you have - Consult with a tax attorney or CPA who specializes in trust taxation for a second opinion - Ask specifically about any grantor trust provisions or special elections that might apply Don't despair - even if capital gains avoidance wasn't actually part of the package, your trust likely still provides valuable asset protection and estate planning benefits that may justify its existence.

Reading through all these responses has been incredibly enlightening! I'm in a similar situation where my family's estate attorney told us our irrevocable trust would help with taxes, but wasn't specific about which taxes. One thing I wanted to add that hasn't been mentioned yet - the timing of when property was transferred into the trust can also matter for tax purposes. Properties transferred into irrevocable trusts retain their original cost basis, but if the grantor dies while still being treated as the owner for income tax purposes (grantor trust rules), the property can potentially receive a stepped-up basis at death. For those asking about 1031 exchanges with trust-owned property - yes, they can work! I successfully completed a 1031 exchange last year with property held in our family's irrevocable trust. The key is making sure the trust qualifies as the "taxpayer" for the exchange and that all the strict timing requirements are met. The replacement property must also be titled in the same trust. @GalaxyGlider - I'd definitely recommend getting that second opinion from a tax professional who specializes in trusts. Don't feel bad about the confusion - this area of law is complex and even professionals sometimes give incomplete information. The important thing is understanding what you actually have now so you can make informed decisions going forward.

Another option if you're still stuck is to check with your tax preparer or CPA if you used one during the years around when you purchased the stock. Sometimes they keep copies of old tax returns that might have records of dividend income from that stock, which could help establish when you owned it and potentially give clues about your purchase timing. Also, don't forget to check your old bank statements if you still have access to them online. Many banks keep records going back 7+ years, and you might find the withdrawal or transfer that funded the stock purchase. Even if it doesn't give you the exact cost basis, it could help narrow down the purchase date and amount, which you can then cross-reference with historical prices. The key thing is to document whatever method you use and keep records showing you made a good faith effort. The IRS is generally reasonable about these situations when you can show you tried to find the actual information.

I went through something very similar about two years ago with an old Fidelity account. What ended up working for me was a combination approach that might help you too. First, I contacted Schwab's customer service and specifically asked to speak with someone in their "account reconstruction" department - apparently they have specialists who deal with exactly these kinds of missing cost basis issues from acquisitions. The regular customer service reps couldn't help, but this specialized team had access to more historical TD Ameritrade data than what shows up in your online account. When that didn't get me everything I needed, I used the IRS's own guidance from Publication 551. They actually have a section that covers "Unknown or Indeterminable Cost" and provides a framework for making reasonable estimates. The key is being able to show you made a good faith effort to find the actual information. I ended up creating a simple spreadsheet documenting: 1) All the places I looked for records, 2) The approximate timeframe I remembered buying (even if it was just "sometime in 2011-2012"), 3) Historical price data from that period, and 4) My reasoning for the estimate I used. I attached this as a statement with my tax return. The IRS never questioned it, and my CPA said this approach shows due diligence while being conservative about not understating the tax owed. Much better than using zero and overpaying significantly.

I'm currently dealing with a CP05 as well and can completely relate to that mix of panic and frustration! Mine arrived about 6 weeks ago for verification of my filing status and dependent information. The uncertainty is definitely the hardest part - you know your return is accurate but the waiting just eats at you. What's helped me cope is setting up weekly check-ins rather than obsessing daily. I check my IRS transcript every Monday morning and call the automated line once a week on Thursdays. It gives me something concrete to do without driving myself crazy with constant monitoring. For your medical expenses, I'd strongly encourage reaching out to the billing departments sooner rather than later. When I explained my CP05 situation to my physical therapy clinic, they immediately offered a 90-day payment extension with no interest or penalties. They said they deal with tax refund delays all the time and have standard procedures for these situations. Having that official IRS letter really legitimizes your request. One thing that's given me peace of mind is learning that CP05 reviews are often triggered by computer algorithms, not human suspicion. Sometimes it's just random selection, sometimes it's because certain credits or income sources require additional verification steps. It's not personal, even though it feels that way when you're stressed about money. The April 14th timeline from your congressional office is actually quite good - that's right in the sweet spot where they can effectively intervene if the IRS hasn't resolved things by then. You've got a solid backup plan in place. Hang in there! From everything I've read and experienced, these situations are way more stressful than they need to be, but they almost always resolve without any drama. The IRS just moves at their own pace unfortunately. 🤞

I'm going through the exact same thing right now and your post really resonated with me! Got my CP05 about 4 weeks ago and the anxiety has been real. Mine is for verification of my earned income credit and it's so frustrating because I know everything I filed is completely accurate. The medical expense situation is what really gets me too - I have some dental work that I've been putting off until my refund comes in, and now I'm stuck in this waiting limbo. Reading through all these comments has been incredibly helpful though. It sounds like most people are getting resolution within that 45-60 day window without having to do anything additional. I took the advice from some of the other commenters and called my dental office yesterday to explain the situation. They were actually really understanding and said they could hold off on scheduling my procedure until mid-April, which lines up perfectly with when you might hear back from your congressional office. One thing I've learned from lurking in this community is that the IRS systems are just incredibly slow and bureaucratic, but CP05 letters almost always resolve themselves eventually. The waiting is absolutely brutal when you need the money, but try to hang in there. Your timeline with the congressional office backup plan sounds solid, and at least you know you have options if this drags on too long. Sending you good vibes that both our cases get resolved quickly! The stress of dealing with the IRS on top of medical expenses is just awful, but it sounds like there's light at the end of the tunnel for most people in our situation. 🤞💪