One aspect that hasn't been fully addressed yet is the importance of getting an accurate valuation of the IRA as of your mother's date of death. This "date of death value" becomes crucial for several reasons: 1. It establishes the basis for calculating any gains or losses on investments within the IRA between the date of death and when you actually liquidate it. 2. For Form 1041 purposes, you'll need this value to properly report the income when distributions occur. 3. It may also be needed for any state estate/inheritance tax calculations. Make sure you get official statements from the IRA custodian showing the exact value as of the date of death. If there were market fluctuations between her passing and when you're planning to distribute, you'll want to understand how that affects the tax calculations. Also, regarding your question about strategies to minimize tax impact - consider whether either you or your brother might have any tax losses from other investments that could be used to offset some of the IRA income. Sometimes families can coordinate their overall tax planning to optimize the situation when large inherited distributions are involved. The coordination between federal Form 1041, state requirements (especially Pennsylvania's inheritance tax as mentioned earlier), and your personal tax situations is complex enough that having a tax professional who specializes in estate taxation review your strategy before you make the distributions would likely save you money in the long run.

I'm going through a very similar situation with my father's estate right now, and I wanted to share a few additional considerations that might help you navigate this complex process. First, regarding the timing of IRA distributions - you mentioned planning to liquidate everything into the estate checking account, but you might want to explore keeping some funds in the IRA temporarily if the custodian allows it. Some custodians will let you maintain the account under the estate's name while you decide on distribution timing, which can give you more flexibility for tax planning. Second, don't forget about the potential for estimated tax payments. With a $450k IRA distribution, the estate (and eventually you and your brother) may need to make quarterly estimated payments to avoid underpayment penalties. The estate will likely owe substantial income tax even if you plan to distribute the income to beneficiaries in the same year. Third, consider the impact on your state income taxes as well. Depending on where you live, the additional income from your share of the IRA distribution could push you into higher state tax brackets or trigger additional state taxes you might not normally pay. Finally, make sure you understand how this affects any other tax planning you might have been doing. For example, if either you or your brother were planning Roth IRA conversions this year, the additional income from the inherited IRA might make those conversions less advantageous. The interplay between federal Form 1041, state estate/inheritance taxes, and personal income tax planning is really complex with amounts this large. Getting professional guidance upfront could save you thousands in taxes and help you avoid costly mistakes.

Clay, I went through something very similar when I relocated my consulting business from Texas to Arizona in 2019. The IRS absolutely counts depreciation when determining profit/loss for the hobby rule, so that $14k in equipment depreciation will factor into your loss calculation. Since you're essentially in year 3 with losses, you need to be extra careful about documentation. The fact that you took a year off in 2023 might actually help your case - it shows you made a business decision to pause operations due to circumstances (partner's illness), rather than just continuing to rack up losses. For your restart in Colorado, I'd recommend: 1) Get a new EIN and business license to clearly document the "fresh start" 2) Create a detailed business plan showing path to profitability within 2 years 3) Keep meticulous records of all business activities and expenses 4) Consider quarterly estimated tax payments once profitable to show legitimate business intent The key is proving this isn't just a tax shelter hobby. Document everything - market research, business meetings, networking events, professional development. The IRS looks at the totality of circumstances, not just the profit timeline.

As someone who's dealt with similar Schedule C loss concerns, I want to emphasize that the IRS hobby loss rule is really about demonstrating genuine business intent rather than just hitting specific profit targets. The fact that you paused operations in 2023 due to your partner's illness actually works in your favor - it shows you made rational business decisions rather than blindly continuing to generate losses. A few key points for your Colorado restart: 1. **Documentation is everything** - Keep detailed records of your business activities, not just expenses. Time logs, client communications, market research, networking events all help prove business intent. 2. **The 5-year window is flexible** - Since you had legitimate business reasons for the pause, and you're essentially restarting with new equipment and location, you have a strong case that this demonstrates serious business commitment. 3. **Depreciation strategy matters** - While depreciation does count toward your loss calculation, bonus depreciation on legitimate business equipment actually supports your case for having a real business with substantial investment. 4. **Consider professional consultation** - Given that you're in year 3 with a restart, it might be worth having a tax professional review your specific situation to ensure you're positioning everything correctly for IRS scrutiny. The key is showing this is a legitimate business venture, not a tax-loss hobby. Your equipment investment and strategic restart suggest you're on the right track!

Has anyone run into issues with their state's Department of Revenue on this? I'm in Washington state and purchased equipment from an individual last year. Even though federal doesn't require the W9 for asset purchases, our state DOR auditor questioned why we didn't have one during our routine audit.

California CPA here - wanted to chime in since I see clients struggle with this exact question regularly. You absolutely do NOT need a W9 for purchasing a vehicle from an individual, even as a business purchase. The confusion often comes from the $600 threshold rule, but that applies specifically to payments for SERVICES (like hiring a contractor), not asset purchases. When you buy a truck, you're acquiring property, not paying for services rendered. Your documentation should include: bill of sale with VIN, title transfer paperwork, proof of payment (check copy/wire transfer receipt), and sales tax receipt from DMV registration. This creates a complete audit trail without needing any W9 forms. One thing to watch out for - if the seller helps with delivery, installation, or any other services beyond just selling you the truck, those service fees might require separate 1099 reporting. But for a straightforward vehicle purchase, you're all set without the W9.

This is such a valuable thread! I'm dealing with the exact same situation right now - been on F1 OPT for 8 months and my employer has been withholding about $250/month in FICA taxes despite me bringing it up multiple times. What's really frustrating is that my company's HR department keeps saying "we treat all employees the same" and doesn't seem to understand that this is actually a legal requirement, not just a preference. I've shown them my I-94 and EAD card, but they keep insisting their payroll system "doesn't have options" for tax exemptions. Reading through all these responses, it sounds like the key is really pushing back with official documentation and framing it as a compliance issue rather than just a student request. I'm definitely going to try the comprehensive packet approach that @ca96349f75f6 mentioned - seems like having everything in one official-looking package makes a huge difference. Has anyone had success with larger corporations (Fortune 500 type companies)? I'm wondering if bigger companies are more resistant to making these changes because they have more bureaucracy, or if they're actually easier to work with because they have more sophisticated payroll systems.

I've been following this thread closely as I'm dealing with the exact same FICA withholding issue on my F1 OPT! Just wanted to share what finally worked for me after months of back-and-forth with my employer. The breakthrough came when I stopped focusing on HR and went directly to our company's external payroll vendor (in our case, it was Paychex, not ADP). I called their customer support line and explained that my employer needed to set up a FICA exemption for a non-resident alien employee. The Paychex rep immediately knew what I was talking about and walked me through exactly which tax codes needed to be changed. They even offered to do a three-way call with my HR department to walk them through the system changes! Turns out there's literally a checkbox in their system for "NRA FICA Exempt" that my HR team had never noticed. The whole thing was resolved within one business day once we got the payroll vendor involved. I think sometimes company HR departments just don't know their own payroll systems well enough to handle these specialized situations. For anyone still struggling with this, I'd definitely recommend bypassing HR and going directly to whatever payroll service your company uses. Most of these vendors (ADP, Paychex, Gusto, etc.) have dealt with this exact situation thousands of times and can guide your employer through the process much more effectively than trying to figure it out internally.

Your PFIC calculation methodology is spot-on! As someone who has wrestled with Form 8621 for multiple years, I can confirm you're taking the right approach with the mark-to-market election for VWRL. A few practical tips from my experience: **Currency conversion strategy**: I maintain a simple spreadsheet with three columns - transaction date, EUR amount, and the Treasury.gov EUR/USD rate for that specific date. This creates an audit trail that the IRS will accept. For your December 31 valuation, make sure to use the official year-end exchange rate. **Quarterly tracking helps**: Since you're planning to hold this long-term, consider noting the FMV at each quarter-end. While not required, it helps you anticipate your year-end tax liability and makes the annual calculation feel less daunting. **The beauty of your VWRL choice**: You picked an excellent fund for PFIC reporting. It trades on major exchanges with reliable pricing, has clear PFIC status, and qualifies for mark-to-market. I learned the hard way that some European funds have pricing gaps around holidays that can complicate year-end valuations. **State tax consideration**: Don't forget to check how your state treats PFIC income. Most states follow federal treatment, but it's worth confirming with your tax preparer. Your €213.96 calculation looks correct assuming proper USD conversion. The mark-to-market election will save you from the nightmare of excess distribution calculations, and starting with such a clean example gives you a solid foundation for future years!

Your PFIC calculation approach is excellent, and I can see you've done your homework! As someone who's been through several years of PFIC reporting, let me add a few insights that might help: **Your methodology is correct**: One Form 8621 per PFIC fund, and your unrealized gain calculation of €213.96 follows the proper approach. The mark-to-market election will definitely simplify your life compared to the default PFIC rules. **Record-keeping insight**: Since you're starting fresh with VWRL, create a master tracking document now that includes: purchase date, shares, EUR price, EUR/USD exchange rate, and USD basis for each transaction. This becomes your permanent record that carries forward each year. Your 2025 starting basis will be the December 31, 2024 FMV converted to USD. **Timing advantage**: You can make the mark-to-market election when you file your 2024 return (by April 15, 2025), so you have time to evaluate whether this approach makes sense for your situation. Just remember it's irrevocable without IRS consent. **Practical tip**: Set up a simple system to capture the Treasury.gov exchange rate immediately after each purchase. I learned this the hard way when trying to reconstruct historical rates months later. Screenshot or print the rate with the date visible for audit protection. **VWRL advantage**: You chose wisely - it's highly liquid, trades on qualified exchanges, and has reliable year-end pricing. Much simpler than some thinly-traded European funds that can create valuation headaches. Your calculation foundation is solid. Just stay disciplined with documentation and you'll find PFIC reporting much more manageable than the horror stories suggest!