I'm confused about one thing - if the apartment is outside the US, don't you have to report it on FBAR and Form 8938 regardless of whether it's rental or personal? My accountant told me all foreign properties need to be disclosed even if they don't generate income.

This is a really complex situation that highlights how confusing tax software can be with edge cases. You're absolutely right that TurboTax should have caught this - when you entered "0" for both fair rental days and personal use days, that's mathematically impossible since the property exists somewhere for 365 days. Based on what others have explained here, it sounds like you need to go back and correct your filing. You should enter 365 days for personal use (since below-market rentals to friends/family are considered personal use), which would take you out of the Schedule E rental property track entirely. The good news is that if your maintenance fees are less than your property taxes, you likely don't need to report any income at all. But you should definitely get professional help or use one of the tools mentioned here to make sure you're handling the foreign aspects correctly - there are additional considerations for foreign properties that go beyond just the rental vs. personal determination. Don't feel bad about the confusion - this is one of those areas where the tax code is genuinely unclear and even tax professionals sometimes get it wrong!

Great question about LLC conversions! I've handled several similar situations and wanted to add a few practical considerations: Regarding your timing question - the 12/31/24 effective date approach is definitely the cleaner route administratively. You're right that it avoids the complexity of short-year returns, and since your partner has 0% allocation anyway, there's no meaningful tax difference between the dates. One thing to watch out for: make sure your operating agreement doesn't have any specific termination procedures that need to be followed when a member exits. Some agreements require formal notice periods or buyout procedures, even for members with minimal stakes. Also, consider having the exiting partner sign a release agreement as part of the conversion process. Even though they have no financial stake, this protects against future claims and provides clean documentation for your records. For the Airbnb property specifically - verify that the property deed and any related financing documents won't need updates when the LLC converts to single-member. Some lenders have clauses about ownership changes that could be triggered. The conversion process itself is usually straightforward, but the documentation cleanup often takes longer than expected. Start gathering all your LLC formation documents, operating agreements, and any amendments now so you're ready when you file the 8832.

I've been through a similar conversion process and wanted to share some additional insights based on my experience: For your Form 8832 timing question, I'd actually lean toward the 12/31/24 effective date as well. The administrative simplicity of avoiding short-year returns usually outweighs any minor benefits of an earlier conversion date, especially when the partner has 0% allocation anyway. One thing I learned the hard way - make sure to update your EIN situation properly. When you convert to SMLLC, you'll generally keep the same EIN, but some banks and vendors get confused about the entity status change. I recommend sending updated W-9s to all your business contacts after the conversion to avoid 1099 reporting issues. Regarding the retroactive ownership agreement in point #3 - I'd strongly advise against this approach. Instead, consider having the partner execute a formal assignment of their membership interest (even if valued at $0) to your client with current dating. This maintains the integrity of your historical records while achieving the same practical result. Also, don't forget about your state's annual report requirements. Some states require you to file an amendment or updated report when membership changes, even for conversions like this. The penalties for missing these filings can be surprisingly steep. Have you considered whether any business licenses or permits might need updating after the conversion? Some licensing authorities treat SMLLC differently than partnerships, especially for rental properties.

Has anyone used the corporate credit card approach? My accountant suggested getting a separate credit card for my S-Corp, putting all client-reimbursable expenses on that card, and then recording the reimbursements as direct payments against those specific expenses in my accounting software rather than as income.

This thread has been incredibly helpful! I'm in a similar situation as the original poster - just converted to S-Corp this year and have been struggling with how to handle client meal reimbursements properly. One thing I wanted to add that might help others: make sure you're keeping contemporaneous records of the business purpose for each meal. The IRS requires documentation of who you met with, what business was discussed, and the specific business relationship. Even with client reimbursement, you still need this documentation to support that it was a legitimate business expense in the first place. I learned this the hard way when my previous accountant told me I just needed receipts, but during a review, I realized I was missing the business purpose documentation for about half my meals. Had to go back through old calendars and emails to reconstruct what each meal was for. Now I write the business purpose right on the receipt when I get it, or immediately add it to my expense tracking app. Also, for anyone using the separate credit card approach that @Zoe mentioned - make sure that card is officially in your S-Corp's name, not just a personal card you designate for business use. The legal separation is important for maintaining your corporate protections.

You're absolutely right to question this situation. Generally speaking, you should only need to file state tax returns in states where the partnership actually conducts business activities or owns income-producing property. The fact that a general partner resides in NY or NJ typically doesn't create a filing obligation for you as a limited partner. However, that $157 showing up on your NY K-1 is concerning and definitely needs clarification. Even small amounts can potentially trigger filing requirements in some states, and New York is particularly aggressive about non-resident taxation. I'd recommend getting written documentation from the general partner explaining exactly what that $157 represents and whether it constitutes NY-source income. If they're telling you to ignore the forms, they should be able to provide you with a clear explanation of why those amounts don't create filing obligations for the limited partners. Don't just take their word for it - ask for specifics about the nature of that income allocation and get their advice in writing for your records.

As someone who's dealt with similar multi-state partnership issues, I'd strongly recommend being very cautious about ignoring any state K-1s that show actual dollar amounts, especially that $157 on your NY form. New York has some of the most aggressive non-resident tax enforcement in the country. Here's what I'd suggest: First, contact the partnership's tax preparer directly (not just the GP) and ask them to explain exactly what generated that $157 allocation to NY. Sometimes it could be something like a small bank account earning interest in NY, or a portion of management fees allocated to a NY-based service provider. Second, consider the cost-benefit analysis. Filing a simple non-resident return in NY for $157 of income would likely result in minimal or zero tax owed, but it establishes a clear record of compliance. The penalty risk of not filing (if you actually should have) could far exceed the cost of just filing the return. I learned this lesson the expensive way when I ignored what I thought was an "informational only" K-1 from Pennsylvania. Two years later, I got hit with penalties that cost way more than just filing the return would have. When in doubt, err on the side of caution with state tax obligations - especially with New York!

I'm going through this exact same situation right now - just did my ID verification last week and got the same 9-week timeline. Reading through everyone's experiences here is both reassuring and nerve-wracking! It sounds like there's a pretty wide range of actual wait times. I'm going to try setting up that IRS account to check my transcript like others mentioned, and maybe look into that taxr.ai thing since trying to decode all those IRS codes myself sounds like a nightmare. Thanks to everyone sharing their experiences - it really helps to know I'm not alone in this frustrating process!

I just went through ID verification myself about 2 months ago and can share my experience. They told me the same 9-week timeline, but I actually got my refund in 7 weeks. What really helped was checking my transcript weekly (not daily - that just drove me crazy) and watching for specific codes. The key ones to look for are: 971 code (which shows they received your ID verification), then eventually the 846 code (refund issued). My transcript didn't move for like 4 weeks straight after verification, then suddenly everything updated at once. The waiting is absolutely brutal when you're counting on that money, but from what I've seen most people do get it within that 9-week window or sooner. One tip: if you haven't already, make sure your direct deposit info is correct - that'll save you an extra week or two versus waiting for a paper check. Hang in there!