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Andrew Lloyd
  • Investor
  • Denver, CO
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ISO Tax professional for upcoming tax season and beyond in Denver

Andrew Lloyd
  • Investor
  • Denver, CO
Posted Dec 5 2022, 16:11

Hello everyone,

I recently purchased my second house hack and I'm looking for some consultation from a tax professional on how to handle the taxes for the upcoming season. I'm new to the real estate game and I want to make sure I'm doing everything correctly and efficiently.

If anyone on this forum has experience with taxes for multiple rental properties, I would greatly appreciate any recommendations for a tax professional who can provide consultation on the tax implications of owning multiple rental properties. I'm looking for a long-term partnership with a tax professional who can help me navigate the tax landscape as I continue to grow my real estate portfolio.

Thanks in advance for your help!

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Basit Siddiqi
Pro Member
  • Accountant
  • New York, NY
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Basit Siddiqi
Pro Member
  • Accountant
  • New York, NY
Replied Dec 19 2022, 23:11

House hacking makes your tax situation more complex.
You purchased a property that is treated as both an investment property and a personal residence. As such, payments that you make need to be prorated between business deductions and personal deductions.

Payments that you make normally fall into one of 3 buckets
100% of the payment can be factored in somewhere on the return
Partial payment can be factored somewhere on the return
0% of the payment can be factored in somewhere on the return

House-hacking also has considerable tax implications in the event that you want to sell this property.

You can potentially defer a portion or all of the gain on the investment property with 1031 exclusion.
You can potentially exclude a portion or all of the gain on the personal residence with section 121 exclusion.