How the New Tax Code Affects REI w Amanda Han and Brandon Hall

24 Replies


Big changes are underway in the U.S. tax code—and it could make a huge difference to your bottom line. Thankfully, today on the Big gerPockets Podcast, we get to sit down with two CPAs who focus entirely on helping real estate investors navigate the tax code! Amanda Han and Brandon Hall join us today as we dive deep into the new changes—plus tackle some of the most common questions new real estate investors ask!

Remember a few weeks ago when we asked for your questions? THIS is the episode that answers them!

Listen here or on your favorite podcast player.

Thank you so much for all the info you've shared in this episode!  SO HELPFUL!!!  Would love it if you had these two awesome accountants on the show regularly or maybe even mini episodes of Q&A.  I'm a big fan and appreciate all the info.  As always.

Such a useful and educational podcast.   I'm so glad that people like Amanda Han and Brandon Hall are out there to assist with the confusing and convoluted tax codes and loopholes.  Now I need to listen about 3 more times to get a good grasp on all the information discussed...

One of the best podcasts in a long time, although I am not sure how you got them on during tax season. Thanks @Amanda Han and @Brandon Hall for the great information explained clearly, so the average person can understand!

This was a great podcast!  Thank you, @Amanda Han and @Brandon Hall !

@Brandon Hall I have one question for you.  At 22:00 you gave an interest limitation example of you and your dad, just you and him, forming an LP with your dad as the 50% money guy, i.e., not involved in managing the business.  I'd assume that if it's just you and him, and he's the money guy, then you would actually be running the business.

I'm thinking that if you, as his son, actively participate in the management of the business, then his interest would not be treated as a limited partnership interest for purposes of the interest limitation rules and so you would not be treated as a tax shelter and so the interest limitation would not apply.

I could be wrong, but my reading is that the definition of "tax shelter" under Section 163(j)(3) (the interest limitation section) refers to Section 448, and 448(d)(3) refers to 461(i)(3), which gets you to 1256(e)(3), which says that an interest in an entity shall not be treated as held by a limited partner for any period if during such period such interest is held by the spouse, children, grandchildren, and parents of an individual who actively participates at all times during such period in the management of such entity (1256(e)(3)(C)(ii)).

Thoughts?

@Logan Allec your interpretation of the code is correct. We aren't expecting technical guidance to change the treatment of family held entities under IRC 1256. My example was an attempt to explain that the new interest limitation will affect a ton of people, not just the big guys. Shouldn't have used my father, rather a friend instead :)

Looking forward to this one. Tax time should be everyones favorite time of year. You get to tell the government to give you money. Who doesn't love that. 

Man I can't wait to listen to this episode tomorrow during my car pool to work!

As a CPA it's great to see quality tax pros like Amanda and Brandon out there giving solid and useful advice! Go team go!!

Great podcast and very helpful!

Great episode. Very thought provoking. If anyone knows a good CPA in eastern PA/Philadelphia, I'd like to take Brandon's advice and find a CPA early in my career.

@Brandon Hall & @Amanda Han

Thanks for sharing such wonderful information for us investors.  It is really great to hear from two CPAs that also invest in real estate.  

I will have to listen to this podcast again.  I will definitely also review bonus depreciation with my CPA since I'm finalizing my taxes.

Most real estate investors really need to listen to this podcast.  It is very applicable whether you have one property or one hundred properties.    

Thank you Amanda and Brandon for your insights and knowledge of this issue. I think it's time for me to get a CPA and help me learn more about tax saving strategies.

Great podcast. I have a follow up question about the bonus depreciation.

We purchased our first SFR in December 2017; however, didn’t purchase the appliances until 2018.

Do I apply the bonus depreciation to my 2017 or 2018 taxes?

Originally posted by @David Jason :

Great podcast. I have a follow up question about the bonus depreciation.

We purchased our first SFR in December 2017; however, didn't purchase the appliances until 2018.

Do I apply the bonus depreciation to my 2017 or 2018 taxes?

David, I'm assuming this is an investment property. You can use bonus depreciation for 2017 only on the 5 (and 15)-year property items that were already there. So the appliances that you purchased in 2018 can be deducted with bonus depreciation only on 2018 returns. 

BUT...If there were appliances or any other 5-year property that can be identified (preferably with a qualified engineer), you can deduct them with 100% bonus depreciation, even if you discarded them for new ones a month later.

Originally posted by @Marc Izquierdo :

Great episode. Very thought provoking. If anyone knows a good CPA in eastern PA/Philadelphia, I'd like to take Brandon's advice and find a CPA early in my career.

Marc, I know a great CPA in Philly, as well as several Virtual CPAs who work nationwide like @Daniel Hyman and his firm My online accountant. PM me if you would like contact info.

Great podcast. I bought Amanda’s book and have listened to 2 of her podcasts now. I particularly enjoy Brandon and Amanda’s commentary and rapport back and forth. I too have made plenty of mistakes, and missed out on many tax savings and advantages over the years but it’s great to hear that I am not alone and that there’s opportunities to jump on now to improve and educate as you go. #ittakesavillage....of rentas ;)

Wow. This podcast was very informative. I'm putting one of my properties through a full renovation right now, so the concept of 100% depreciation at onset will really help me out. Further, I'm loving the BARRRR concept, too. Thank you @Amanda Han , @Brandon Hall , @Brandon Turner , and @Scott Trench . True gold.

I thought the podcast was amazing!  At first, I wasn't sure how they were going to make a podcast about taxes interesting, but it was very entertaining and informative!

Thanks for a great podcast @Amanda Han and @Brandon Hall !  I took to heart what you said about getting an itemized list of upgrades/repairs to a property that I am getting ready for being a rental.  I am talking to several contractors I was referred to and they will not break things down by item in their estimates.  Any suggestions on how to get them motivated to do that?

@Logan Allec

In your post regarding "tax shelter" where llc members are related by family and each participate in the business, would each member be considered a general member on schedule k-1 for section G? If so, then the interest limitation would not apply?

Loved this podcast: it was incredibly helpful and clear! Thank you to @Amanda Han and @Brandon Hall  for sharing your expertise and advice. Thank you also to Brandon and Scott for your pertinent questions that helped delve into specific details that us investors were hoping to hear more about!

Bonus Depreciation.

If i purchase a new construction as investment and put in service for rental, upgrades on top of the base price of the House(As sold by builder), can I deduct it on year 1?

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