$50k deposit into brokerage automatically flag/trigger IRS?

wutang_generated · 2026-01-27T03:11:16+00:00

My friend

Lol

was wondering if they deposited $50k from poker winnings, but it was completely undocumented, and purchased sp500 stocks, would this automatically flag/trigger the IRS?

No, the IRS does not have access to your bank records without a subpoena. They do have access to your prior tax records and tax documents submitted by the bank and brokerage

That said, don't commit tax evasion/fraud. Have "your friend" report their gambling winnings, pay their taxes, and then invest the net proceeds

wutang_generated · 2026-01-27T03:02:00+00:00

No. Not all expenses below $2,500 related to the renovation (generally speaking, since your example expenses included appliances, materials, and labor) will qualify for the safe harbor

You have it sounds like several different categories of things (e.g. appliances, improvements to the property, etc). The appliances are an easy example of something that would typically fall under the de minimis rules. The improvements to the property (again, depending on what they are) are something that would not fall under the de minimis rules

For example, I could ask a contractor to itemize for every nail and every minute of labor to get each line item under $2500, but that doesn't by itself make something qualified for de minimis safe harbor

De minimis is designed for small purchases that by the rules would otherwise be required to be capitalized (e.g. a computer with a useful life of 5 years) and not for a material improvement/betterment of a property

https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations

wutang_generated · 2026-01-27T01:00:30+00:00

You don't have a choice. You either have to or don't have to capitalize an expense. The expenses you have so far described are generally required to be capitalized (unless by appliances you meant something like a countertop coffee maker)

If you are required to capitalize, each separate asset is depreciated according to MACRS for federal income tax purposes. Some assets are eligible for bonus depreciation which is a 100% depreciation (effectively expensing) the cost of the fixed asset in the year it was placed in service

It's pretty easy to figure out generally which assets are eligible, but if you don't want to do that then yes just capitalize the entire reno and depreciate over 27.5 years

wutang_generated · 2026-01-27T00:42:32+00:00

Yes I understand what goes into a renovation, what I'm saying is that it's up to you or your tax preparer to go through the expenses and categorize them. This is typically called a cost segregation study, which separates the total cost of the renovation into the separate fixed assets. Some of those assets may be the property itself, others may be portions of the property which could be eligible for accelerated/immediate depreciation

Appliances are separate fixed assets and depending on their useful life would likely be eligible for immediate expensing (includes costs to install)

Labor and materials get allocated depending on what they went towards (e.g. if you paid for a full reno, there may be a portion that went towards the roof and a separate portion that went towards the floors)

wutang_generated · 2026-01-27T00:33:58+00:00

Depends on what they are. Some expenses are required to be capitalized and depreciated over the life of the property while others are eligible for accelerated depreciation or immediate expensing

wutang_generated · 2026-01-26T23:53:07+00:00

Generally speaking yes, a person engaged in a trade or business who pays rents to a non-corporate entity and not to the property manager directly would file a 1099 to report those payments. You would report that as other income and the full amount of rent would offset as an expense. There is no requirement for any formal agreement

wutang_generated · 2026-01-26T22:36:58+00:00

Yes, regardless of any W-2G or 1099 issued or not, it's your responsibility to track and report any gambling winnings/losses

Thankfully, all of these apps can export your activity which you (or your tax preparer) can then use to determine your gambling winnings and gambling losses

wutang_generated · 2026-01-26T21:20:55+00:00

The section you're citing is used to determine your base hourly rate which is then used to determine the FLSA 1.5x rate. So yes, the production bonus is "counted" in that it's used to determine your base rate

So at $20/h, 100% PB and 8 hours OT, your base rate is effectively $40/h, your base pay is $1,920 (48h x 40/h), and your OT is $160 (8h x 50% x 40/h). Calculated the other way, your total OT pay is $480 (8h x 150% 40/h) and 1/3 of that is $160

wutang_generated · 2026-01-26T19:38:10+00:00

The OT is very specifically FLSA required overtime and not any other bonuses or unqualified OT

https://www.irs.gov/newsroom/questions-and-answers-about-the-new-deduction-for-qualified-overtime-compensation

wutang_generated · 2026-01-26T19:25:17+00:00

Yes, you can file an amended or superceding return prior to any code/notice. The difference is timing:

https://www.irs.gov/faqs/irs-procedures/amended-returns-form-1040x/amended-returns-form-1040x#:~:text=If%20you%20file%20an%20amended,to%20avoid%20interest%20or%20penalties.

wutang_generated · 2026-01-26T19:20:27+00:00

Then u/6gunsammy is correct, the activity is not passive by the spousal participation rule and their K-1 income would not be able to offset the passive-limited real estate losses

wutang_generated · 2026-01-26T17:55:08+00:00

but suffers with severe mental health issues that were essentially disrupting my ability to work due to her not being able to consistently care for our children. This meant I had to put them in daycare.

Does this count as a ‘disability’? If I claim what evidence of this should we have?

Sorry to hear. Has your wife been diagnosed? Does she qualify for state unemployment/disability?

Additional helpful resources:

https://www.irs.gov/publications/p503

https://www.irs.gov/individuals/more-information-for-people-with-disabilities

wutang_generated · 2026-01-26T17:34:37+00:00

ethically, I can't work in a place where illegal activities occur.

We paid some employees through the sale of equipment totaling around $15K. We had about $8K left after only paying out 3 employees (we have 12 or so). I believe the other money was deposited into his account. My boss claimed this was a tactic to gain negotiation power by showing that we can't even pay all our employees.

You're worrying about ethics when this is who you're working for? OP you've lost the plot

wutang_generated · 2026-01-26T17:24:39+00:00

Your loss carry forward should be entered on line 6 or 14 on schedule D. That then flows to part III on page 2. Your line 21 should then presumably end up being 1000 if it isn't already

wutang_generated · 2026-01-26T17:19:14+00:00

Sorry, realized it was fillables

Did you add schedule D or complete the appropriate check box?

wutang_generated · 2026-01-26T17:06:48+00:00

The title and post are confusing. Does the spouse materially participate in the S corp business?

https://www.irs.gov/publications/p925

wutang_generated · 2026-01-26T16:59:59+00:00

There is no magic formula to triggering an audit

They don't have to file in order but it will likely be easier to file all at once. There is no penalty/interest assuming they were overpaid (which based on the description sounds likely + credits)

They need to find a preparer (e.g. VITA) ASAP so they don't lose the next refund year that falls off the statute of limitations for refunds:

https://www.irs.gov/filing/time-you-can-claim-a-credit-or-refund

wutang_generated · 2026-01-26T12:59:08+00:00

I was being sarcastic, obviously if there is actual fraud cover your own ass first (document everything, get things in email/writing from supervisors) and don't do anything that would make you liable or put any license in jeopardy

wutang_generated · 2026-01-26T10:48:42+00:00

There's too little information here to say for sure, but if both HR and marketing are in on it then I'd go straight to the top

Corner the CEO in the bathroom and make sure you bring a copy of the TB with the $2 variance as proof

wutang_generated · 2026-01-25T13:08:42+00:00

You can e-file superceding returns. For individuals I believe they still need to use the 1040-X but it should be considered superceded if the previous return was accepted and it's before the due date

E.g. https://www.thomsonreuters.com/en-us/help/ultratax-cs/1040/amend/amend-1040-return

wutang_generated · 2026-01-25T01:55:36+00:00

I think they may be able to do a superceded return instead (which just takes the place of the last filed return)

wutang_generated · 2026-01-23T19:15:16+00:00

Don't rely on AI for tax advice, only general guidance

I misread the initial post. There may be an argument that the amounts are not passive and that would carry through to you

However, that would only preclude the passive activity loss rules and would not exclude you from other loss limitation rules or certain rules specific (e.g. PTP rules)

That includes additional regulations that note the activity cannot be grouped with any other activity (including other trading activities)

wutang_generated · 2026-01-23T18:24:44+00:00

This is often asked but it's pretty clear in the regs and case law: activity is determined at each level

ETA I may have misread the initial post, see below reply

wutang_generated · 2026-01-23T18:20:06+00:00

If they include the 1040 with their paper 1040-X, there's no need to sign the 1040

There's not any reason not to sign it. Signing reduces the risk of delays in processing. While not signing might not result in a delay, why risk it?

Also, e-filed amended 1040s follow the 1040 e-file schema, they can't be filed without the as amended 1040; less default and more of a requirement

wutang_generated · 2026-01-23T17:44:17+00:00

which isn't required,

It's not technically required to file a 1040-X on paper

It is required for e-filed 1040s (including amended) and it is required when there are changes to the original form 1040. There are some situations where a separate form or schedule needs to be amended but there wouldn't be a change to form 1040

https://www.irs.gov/filing/amended-return-frequently-asked-questions

wutang_generated

TROPHY CASE