Has anyone used TurboTax for calculating depreciation recapture and capital gains on a high-value property like this? I'm worried it might miss something with these complex calculations.

One important detail that hasn't been fully addressed - make sure you understand how the timing of your sale affects your tax situation. Since you mentioned your tenants are leaving soon and you're considering moving back in, the actual date of sale versus when you establish primary residency again can make a significant difference. Also, don't forget to factor in potential state capital gains taxes on top of the federal calculations everyone has been discussing. Some states have no capital gains tax, while others can add substantial additional tax burden on a gain this large. Given the complexity and the substantial dollar amounts involved ($146K+ in potential federal taxes), I'd strongly recommend getting a consultation with a CPA who specializes in real estate transactions before making any final decisions about timing the sale or moving back in. The cost of professional advice will be a tiny fraction of the potential tax savings you could achieve with proper planning. Have you considered a 1031 exchange if you're planning to buy another investment property? That could defer all the capital gains taxes, though it wouldn't help with the depreciation recapture portion.

Wait, I thought you couldn't change from MFJ to MFS after filing? My accountant told me once you file jointly, you're locked in for that tax year???

I went through this exact situation two years ago and want to share some practical tips that might help. First, definitely run the numbers on both scenarios before deciding - I used a spreadsheet to calculate my total tax liability under both MFJ and MFS, then compared that to my projected student loan payment savings. One thing that caught me off guard was timing the payments. Since you already received your joint refund, you'll likely owe additional tax when filing separately (especially your husband if he had less withholding). Make sure you have enough cash on hand to pay any balance due by April 15th, or you'll face penalties and interest. Also, keep detailed records of how you split everything - income, deductions, the refund amount, etc. The IRS may ask questions later, and having clear documentation saved me a lot of headaches when they requested additional info about our amendment. The paper filing requirement for 1040X is annoying, but send both returns via certified mail so you have proof they were received. It took about 4 months to get confirmation our amendments were processed, so be patient. The student loan payment reduction made it all worthwhile though!

I'm sorry for the loss of your mom and the added stress of taking over the family business finances during such a difficult time. As others have mentioned, requesting bank statements alongside your P&L is actually standard practice for CPAs - it's their way of doing due diligence to verify that income and expenses in your books match actual transactions. However, the bigger concern here seems to be the overall relationship and communication style. A good CPA should be explaining why they need these documents and working WITH you rather than against you. The fact that they're being inflexible about legitimate business deductions and pushing their own bookkeeping services while being dismissive of your work is problematic. Given that this resulted in late filing last year and you're experiencing the same issues again, it might be worth getting a consultation with 1-2 other CPAs to compare approaches. Many will do a brief consultation to review your situation and explain their process. You deserve to work with someone who respects the work you've done to get the business back on track and communicates clearly about what's needed and why. The documentation requirements won't change with a different CPA, but the experience of working with them certainly can improve significantly.

I'm really sorry about the loss of your mom and having to navigate all this during such a difficult time. Taking over family business finances is overwhelming enough without feeling like your CPA is working against you. What you're experiencing with the bank statement requests is actually completely normal - CPAs are legally required to verify the information they're filing, and bank statements serve as that third-party proof that your P&L numbers are accurate. It's not about not trusting your work, it's about professional liability and audit protection. That said, the way your CPA is handling this sounds problematic. A good CPA should be explaining WHY they need these documents instead of just demanding them. And the fact that they're being inflexible about legitimate business deductions while also pushing their own bookkeeping services feels like a red flag to me. My suggestion would be to get consultations with 2-3 other CPAs in your area. Most will give you a brief meeting to discuss your situation and explain their process. The documentation requirements will be similar everywhere, but you should be able to find someone who communicates better and works collaboratively with you rather than making you feel like you're being interrogated. You've done incredible work getting the business organized after such a loss - you deserve to work with a professional who recognizes that effort and supports you through the process.

I've been following this thread and wanted to add my perspective as someone who works in tax resolution. You're getting great advice here, and I'm glad to see people steering you toward understanding that a CP2000 is very different from a full audit. One thing I'd emphasize that hasn't been mentioned much - when you respond to your CP2000, be very clear and concise in your explanation. The IRS processors handling these cases deal with thousands of responses, so make it easy for them to understand your situation. If you're agreeing with the assessment, say so upfront. If you're disputing it, lead with that and then provide your supporting documentation. Also, keep copies of EVERYTHING you send to the IRS. Mail your response certified mail with return receipt so you have proof they received it. I've seen too many cases where people's responses got lost in the system and they ended up with additional penalties for "not responding." The tools and services mentioned in this thread (taxr.ai, Claimyr) are legitimate options that can help bridge the gap between doing everything yourself and paying for expensive full-service audit defense. For a straightforward CP2000 like yours, they're probably all you need if you want some extra support.

This thread has been incredibly educational! As someone who's never dealt with IRS notices before, seeing all these real experiences has been way more helpful than just reading generic advice online. A few key takeaways I'm getting from everyone's stories: 1. CP2000 notices are much more manageable than full audits - they're basically just asking you to explain a discrepancy 2. Many times these notices happen because of address changes or clerical errors, not because you did anything wrong 3. The 30-day response deadline is crucial - don't let it slide 4. There are cost-effective tools like taxr.ai and Claimyr that can help without paying for expensive audit defense services 5. Sometimes you already have audit protection through your tax software What I'm curious about is whether anyone has experience with what happens if you partially agree with a CP2000? Like if the IRS says you owe $4,700 but you think the correct amount is only $2,000 due to business expenses or deductions they didn't account for? Do you need to file an amended return in that case, or can you just explain the discrepancy in your response letter? Thanks to everyone who shared their experiences - this community is amazing for getting real-world advice instead of just theoretical information!

Has anyone run into issues with employees who moved further away after going remote? We have some team members who relocated to rural areas 60+ miles from our client base after we went fully remote. When they come in for client meetings, they're claiming much higher mileage than when they lived closer to the metro area.

This is a great question that many remote-first companies are grappling with! Based on everything discussed here, it sounds like you're actually handling this correctly already. When employees work from home 100% of the time and don't have a regular office they report to, their home becomes their established workplace for tax purposes. The key factors that support your current approach: - Your team is truly 100% remote (no physical office they report to) - Travel from home to client sites constitutes business travel, not commuting - Reimbursing at the standard IRS rate keeps it non-taxable for employees A few recommendations to strengthen your compliance: 1. Update your employee handbook/agreements to explicitly designate home as the official workplace 2. Implement stronger documentation requirements (business purpose, exact addresses, odometer readings) 3. Ensure you're following accountable plan rules (timely submission, business connection, excess repayment) The fact that you don't have a brick-and-mortar office actually makes this cleaner from a tax perspective - there's no ambiguity about where employees' "regular workplace" is located. Keep doing what you're doing, just tighten up the documentation!