Where do I put these Expenses? (Write Off Everything)

4 Replies

I am going to be getting into real estate soon. However I would really appreciate some suggestions please.

I only own one company right now, and currently do not invest in real estate. I want to write some things off of my taxes, however I do not want to run them through my telecommunications company that I own right now, because my employee's bonuses are based off of the company's profit. Things like: business or real estate seminars or classes, business or finance or real estate books, travel/vacation expenses to go look at real estate, meals when I talk about business, etc.

I would like to write these things off, however I don't want to be unfair to other people who earn bonuses based off of the company's profit. Also, I am considering adding a partner soon, so it would also be unfair to each other if either of us wrote off real estate travel expenses, etc..

I am going to start investing in single family or multi family real estate soon, and plan to put them in their own LLCs.

Should I just form another company that owns all of the real estate LLC's and put my travel, personal development, business training, etc. expenses in the parent company? or maybe a separate consulting company and put the expenses in there? Maybe a completely different approach?

How would you recommend structuring the entities? Thank you!

@Damon Porter

Structuring the business will depend on several factors including tax liability and asset protection.  You should put together a team (CPA and attorney(s) to help craft).

One way to do it is to have an "acquisition company" where all of the expenses are charged. Once the property is acquired and transferred to an LLC then you can start charging individual expenses against it.

You are unable to write off these expenses until you actually begin the business.  At that point, you can write off some in the first year you are in business while the rest will be amortized over the first few years of the business.