How to take advantage of 2018 taxes

Question

Basit Siddiqi · Answer

@Ken Bradley - Thank you for the clarification. I totally misread that.Account Closed I suppose you are talking about the new 20% pass-through deduction. As strange as it sounds - you are not required to have an entity to take advantage of the deduction.Another thing about the deduction is that your business needs to operate at a profit to take the deduction.Real estate normally operate at a loss thanks to depreciation. So this is something to consider as well.

Basit Siddiqi · Answer

Account ClosedWhat are you specifically looking to do when you transfer the title of your personal residence to an LLC/S-Corp.You will not be able to report the rental expenses if it is you are living in the property as your personal residence.You would not be able to exclude future appreciation based on section 121 exclusion.You would pay money to structure the LLC/S-corpYou would pay annual fees for the upkeep of the LLC/S-CorpYou may potentially be required to file a business entity return requiring you to spend additional $$

Account Closed · Answer

@Basit Siddiqi Thanks Basit. So it sounds like I can just leave the rental property as-is without any entity changes and still reap the tax benefits.

Account Closed · Answer

@Ken Bradley Yes, that's what I meant. I own a property under my personal name. I want to know if I should change the ownership to an LLC or possibly get a business ID in order to maximize the most in the new tax law.

Ken Bradley · Answer

Interested in this thread...Basit, what Guy is talking about is not his residence, but a rental property currently in his name.  This is the same situation I have and my CPA says just leave it in my name and get insurance.  However, I am not realizing any of the depreciation or cost of upkeep on my taxes because my wife and I make too much money.  Seems like it would be better to place it into an LLC with my next house and take the depreciation and upkeep as a loss against the income...looking for any thoughts