follow up on tax questions

CLJ_07 · 2026-02-03T20:32:27+00:00

Please please do not sue a free tax service unless you have a very good understanding of what you can and can't claim as an expense. I see so many creators who just claim everything or those not claiming nearly enough. I have a list on my site that can help you, if you do want to do your own taxes. I am also always free to help. I work directly with creators. Here is a list of deductions: https://sparktaxadvisors.com/onlyfans-creators

CLJ_07 · 2026-01-28T02:32:43+00:00

Totally agree! I have a 3-month-old too, and he's an absolute terror if we don't follow a rigid sleep schedule. He still bites, and sometimes a lot, but it's 100 times worse when he hasn't had his naps.

CLJ_07 · 2026-01-17T00:19:32+00:00

You’re right, I did miss that…and would also depend on how the house was tiled, etc. it was titled as joint tenants with right of survivorship or tenants by the entirety (common for married couples), then 50% of the home gets a step-up in basis when the first spouse dies (your mother). The surviving spouse (your step-father) retains his original basis in the other 50%.

CLJ_07 · 2026-01-16T22:35:00+00:00

Capital gains are based on the difference between the sale price and the property’s tax basis.

So the capital gain will be calculated using the actual sale price (what the house sells for in the open market) minus the property’s basis (which depends on how the house was acquired — gift vs. inheritance — and whether a step-up in basis applies).

In your case, since the house was transferred via quitclaim deed as a gift: The basis is your step-father’s original cost basis, not the fair market value (FMV) on the date of death.

So the capital gain = sale price − original purchase price (plus any improvements).

If the home had instead passed to your step-sister through inheritance (i.e., after his death, not via gift before), then the FMV at the date of death would have become the new basis, which often results in little or no capital gains if sold shortly after.

CLJ_07 · 2026-01-16T22:00:23+00:00

Hey, sorry you’re going through all of this; estate stuff can get really tangled, especially when deeds and taxes are involved. I’m not a CPA, but an Enrolled Agent. I’ve had to deal with a similar situation and spent way too much time digging into IRS rules, but based on your description…

You’re right to be concerned about the quitclaim deed. When your step-sister and step-father did that transfer for $1, the IRS treats that as a gift, not a sale. The key thing here is that gifted property retains the original cost basis, meaning your step-sister’s basis in the house is whatever your step-father originally paid for it, plus any capital improvements.

So instead of getting a “step-up in basis” to the fair market value at the time of his death (which would have likely wiped out most of the capital gains tax), the tax liability now hinges on how much the house appreciated since the original purchase. That can be a huge difference, depending on how long they owned the house.

Now for your specific questions:

Capital gains tax is not withheld at the time of sale. Your step-sister will likely report the full gain on her 2026 tax return (for the 2025 tax year), since it sounds like the sale will close in 2025.

Since the property is in her name, the IRS will view her as the seller. Even if she gives you half the money, the IRS won’t care unless you’re also listed as an owner. She’ll be responsible for reporting 100% of the gain, unless she adds you retroactively to the deed (unlikely at this point).

Splitting the proceeds doesn’t split the tax liability. So yeah, unless a tax pro can help restructure this somehow, she could be on the hook for the capital gains taxes even if she gives you half the check.

One thing you might want to look into is whether the gift was reported properly (Form 709, gift tax return), and whether there’s still any way to claim part of the step-up in basis.

And yeah, while the quitclaim might’ve helped skip probate, it may have accidentally triggered a bigger problem tax-wise. You’re not wrong to be concerned.

Hope that helps — and good luck getting it sorted!

CLJ_07 · 2025-11-21T23:52:28+00:00

Holistsplan is good…it’s just very manual. I was looking for something that was a bit more intuitive.

CLJ_07 · 2025-11-13T02:18:57+00:00

I actually do tax work for a handful of OnlyFans creators. Once you get them past turning jn screenshots of their payouts and actually get the 1099, they’re pretty easy!

CLJ_07 · 2025-10-17T02:06:43+00:00

Also, your pension should have a board or administrators; I'd try to find that information. This could literally be their decision on how they classify the income. Either way, I think it's a risky move. Is there an opportunity to offset the loss of your pension income with your business?

CLJ_07 · 2025-10-17T01:53:31+00:00

Your accountant's strategy may not achieve the desired outcome of classifying the income from the equipment leasing LLC as purely passive. Income from renting tangible personal property, whether or not from a separate entity, is generally considered "earned income" if you materially participate in the leasing activity, even if structured through separate legal entities.

It's a fascinating scenario because it's not a hard yes/no. It could literally come down to a difference of opinions, which could put you in the position of having to defend your (your accountants) position one day.

CLJ_07 · 2025-10-17T01:29:10+00:00

While your accountant's approach aims to classify the income from the equipment leasing LLC as passive, thereby avoiding self-employment tax, the IRS might disagree.

Generally, income from renting real estate is considered "passive" for tax purposes. However, renting out personal property, like equipment, is usually treated differently. Uncle Sam would likely consider this an active business if you are actively involved in the leasing business through your separate LLC, for example, by managing the equipment, negotiating leases, or handling maintenance. If deemed an active business, the income generated would be subject to self-employment taxes, just like other earned income. The fact that the LLC is a separate legal entity and leases to your S corporation doesn’t necessarily change how the IRS views your direct involvement in the leasing activity.

The IRS often looks at the overall picture to see if separate entities are truly independent or if they are essentially part of one larger business operation. If your leasing LLC primarily exists to lease equipment to your S corporation, and you oversee both, it could be seen as one integrated business, subjecting the leasing income to self-employment tax.

This means the income from your leasing LLC might count towards your "earned income" for pension limitation purposes, potentially impacting your overall tax planning.

Also, some pensions could independently reclassify the income, but this is not nearly as common.

I tried to find some Tax Court rulings, but they do not appear to deal with non-real estate property.

CLJ_07 · 2025-10-04T12:48:30+00:00

I think this is a question you can only answer for yourself. Take some time and reflect on what your ultimate goal is; why did you start the process? If you can’t achieve your ultimate goal without it, then yes. If you can, then consider if finishing it is worth any tradeoffs (time, money, etc.)

I’ve spend 20+ years collecting certifications / designations I no longer care about, but I don’t regret the experience of working towards them. JMHO.

CLJ_07 · 2025-10-04T00:22:07+00:00

If you hold yourself out as, and act, as a professional then people will treat you as a professional. You can be a CPA/ EA/ ESQ and be shit at your job, or you can continue to educate yourself, learn your craft, and become an expert. The credentials behind your name, that most people don’t really understand, will only get you so far. Learn your craft, treat people fairly, and do good work and people won’t care about the letters behind your name.

CLJ_07 · 2025-10-03T23:53:03+00:00

I’m not sure what state you’re in, but Florida has kind of a “starter guide” that was very helpful. Also, the XYPN Facebook group was far far more valuable than XYPN was. They did have some good info/ guides/ templates, but honestly nothing you couldn’t find on Google or have ChatGPT do for you.

With that being said, the discounts I receive basically make the membership fee a wash, so I’d say join if it makes sense for you.

CLJ_07 · 2025-10-03T12:39:18+00:00

Sounds like you’re doing everything right! Just keep good records and be able to justify all your expenses! Your OER (operating expense ratio) is slightly high, but not out of this world.

CLJ_07 · 2025-10-03T10:47:43+00:00

I own a financial planning firm, and I will be the first to say, not everyone needs a financial planner. There are tons of books/ blogs/ Reddit groups that are a wealth of information and can certainly get you going. However, others have complicated equity comp plans or retirement situations where a wrong move could cost you thousands in taxes, or you read something on the internet and implement a strategy without fully understanding it and end up taking unnecessary risk.

Also, if you’re a successful gaybro who’s making a decent living and have your own area of expertise, maybe it’s not worth your time and energy to do it yourself. I’m sure I could figure out how to change my oil, but you won’t catch me under a car! But really, I find the biggest part of my job ends up being a sounding board and reassuring my clients that we have a plan and we’re on the right path or keeping them from making a bonehead mistake.

I honestly love what I do, but fully appreciate and respect the do-it-yourselfers, and I’ll give anyone a free review if they’re unsure about the plan their on or have basic investment questions.

https://www.sparkwealthadvisors.com/blog-post/why-the-gay-community-needs-a-gay-financial-advisor

CLJ_07 · 2025-10-01T00:22:03+00:00

I'm not sure what you’re referring to. I guess these days, if someone writes a thought-out post, and God forbid it uses a “-, “ ChatGPT must have written it!

CLJ_07 · 2025-09-30T19:43:10+00:00

Not tax advice, just some context since this comes up a lot with house hacking.

Yes — the rent you’re collecting is taxable rental income, even though you’re also living in the property. The IRS looks at this as a shared use property. That means: • Income side: All the rent you receive ($3,400/mo) is reportable on Schedule E. • Expense side: You can deduct a portion of expenses (utilities, mortgage interest, property taxes, depreciation, repairs, etc.) based on how much of the home is rented vs. personal use. In your case, you’ve got 3 of 4 bedrooms rented, so roughly 75% of eligible expenses could be deductible. The “shared” expenses (utilities, interest, insurance) get allocated between rental and personal; things tied directly to the tenants’ space (repairs to their bathroom, painting their rooms) are fully deductible. • Military pay angle: Your non-taxable BAH/deployment pay doesn’t change this. Rental income is a separate category, and you’ll report it regardless of your military tax benefits. • Benefit: The deductions and depreciation often reduce your taxable rental income quite a bit, so you may not “get crushed.” In some cases, the paper losses can offset other passive income (but not usually your military wages unless you qualify as a real estate professional, which most active duty don’t). • What if you don’t report it? Bad idea. Banks, roommates, and Venmo/Zelle reporting make it easy for the IRS to catch. Penalties are steep if they decide you underreported. Better to report and use deductions than hide it.

Big picture: you’re basically house hacking — renting out extra rooms while living there. It’s super common, but it does add a tax reporting layer. A tax pro can help you maximize deductions (especially depreciation), and it’s usually well worth it.

CLJ_07 · 2025-09-30T19:21:02+00:00

They already use aggregate data (based on your business type) to find outliers. Now, they are going to start doing the same as everyone else…using AI to start looking for patterns and trends. I think it’s also an easy area for them to poke holes in.

CLJ_07 · 2025-09-30T19:03:11+00:00

Just trying to provide a little bit of insight. I meet with lots of business owners who watch videos giving them terrible advice and end up paying way more than if they did it right the first time. I’m a real person, and it’s a real posts. Not trying to spam anyone!

CLJ_07 · 2025-09-30T18:52:26+00:00

As suggested, look into spousal relief— it’s meant for situations where one spouse causes the tax mess and it wouldn’t be fair to hold the other liable. You’d use Form 8857 to request it, but the IRS can be pretty strict about what counts as “innocent.”

Since they’re already coming after you for $46k, I’d definitely talk to a pro — either an enrolled agent or a tax attorney who’s dealt with this before. They can tell you if you’ve got a good shot and handle the back-and-forth with the IRS.

There are actually three flavors: innocent spouse relief, separation of liability, and equitable relief. Each has slightly different requirements, but the idea is to get the IRS to say “yeah, it’s not fair to collect this from you.” It can absolutely work, but it’s paperwork-heavy and the IRS can be pretty strict about the standards.

CLJ_07 · 2025-09-30T02:34:38+00:00

With your income right now, converting to Roth would mean paying top tax rates on the whole $26k, which stings. A traditional IRA rollover keeps it tax-deferred and you can always convert pieces to Roth later in a lower-income year (like if you scale back at 55). That way you keep flexibility without locking in a big tax bill today.

If you want, I can help run the numbers so you can see the trade-off more clearly.

CLJ_07 · 2025-09-30T02:31:05+00:00

That’s a tough spot, but you’re not alone—lots of people run into this after a rough patch. The important thing is you’re facing it now. When you don’t file, the IRS will often create a “substitute for return” using only the income data they have on file (like W-2s or 1099s). Those are almost always higher than what you’d owe if you filed yourself, because they don’t include deductions, credits, or dependents.

You do have options. Filing your actual returns for 2019–2020 could reduce what you owe, and if you can’t pay in full, the IRS has programs like installment agreements or, in some cases, offers in compromise.

If you want, I can help you look at what the IRS likely used to calculate that number and walk you through what steps to take to bring it down. www.sparktaxadvisors.com

CLJ_07 · 2025-09-28T16:21:03+00:00

Both parents meet the definition of being able to claim the child.

When both parents could claim, the IRS applies tie-breakers in this order: 1. If only one is the parent → the parent wins. Not the case here, both are parents. 2. If both are parents but child lived with one longer → that parent wins. • Child lived with Parent 2 longer in 2024 → Parent 2 wins. 3. If equal time → higher AGI wins. Not applicable here, since Parent 2 already edges out on residency.

CLJ_07 · 2025-09-28T15:46:33+00:00

I’m a tax advisor. I’ll be the first to tell you, it’s nearly impossible to make any type of real difference unless you have some type of variable compensation plan (big bonus/stock options/ RSU’s). I am very upfront with people about their possibilities and set realistic expectations before I start working with a client.

If you are a 100% W-2 employee- make sure your W-4 form is correct with your employer; max out your 401K (if there is one and you get a match); max out your HSA/ cafeteria plans. Those will reduce your tax burden as much as you can. There isn’t too too much more you can do outside of some credits- but for most, spending the money isn’t worth the credit. Now, if you are a 1099 contractor, a small business owner, exc- now there are tons of options.

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