All Forum Posts by: Aaron Zimmerman

Congrats on the property! Very happy for you!

I would consider leaving one property being free and clear and potentially utilize that as collateral for a construction loan if you're trying to build more. 

@Sara Murphy - to add, I think if you're quitting your job, you will want to consider a career in real estate. It is much easier to qualify for real estate professional status when you have another business (I.e. realtor) and then find a way to materially participate in all the rents. You would basically need to work on the properties for 187.5 hours per property for the year to qualify.

if you are a realtor and assuming you meet the reps requirements, you would need to materially participate which is a much lower bar to clear. 

I would agree with@Michael Plaks. You can point out the errors, which I think is the right thing to do. However, it's really not your problem. It is Your problem for this year and going forward.

i would have the client weigh cost vs benefit and discuss with previous CPA. 

Congrats on commiting! What type of property are you looking to purchase?

I have many clients that are over the $150k threshold and ultimately we do our best to capture all allowable deductions and roll them forward. It will Be beneficial if/when you sell the property. Almost always, it will Hurt you from a tax perspective to file separately as opposed to jointly. I would have your cpa run through what it would Look like to be MFJ vs MFS. Regarding the travel to other states where you don’t yet have property, your travel cost will get added to the basis of the property. When you have a property in a market, your travel costs may be deductible. I’d recommend leveraging your w-2 to purchase as much property as possible. In practicality, very hard to live off cash flow.

I would house hack again. The goal is to reduce your housing expense and make sure the property cash flows after you leave. I think it's still possible in Madison Wisconsin although I'm sure it's harder now than in 2021

There's a lot here and a lot of moving parts.

If you're trying to claim real estate professional status, you'll want to understand which hours count and which hours don't.

Assuming you qualify, you'd want to see if cost segregation studies based on your unique tax situation. I always tell my clients that if you're dipping into the 10 or 12% bracket on federal, you're not gaining that much benefit compared to higher brackets and doesn't make as much sense.

On the realtor side, there could be some good opportunities to reduce taxes depending on how much money you have available to save. 

I would recommend any bank that uses zelle for their business accounts. Zelle is absolutely crucial for paying contractors/tradespeople in my experience. 

Congrats on deciding to take the tax savings in your hands. When you work with your cpa, you want them to guide you through the short term rental loophole. Many of my clients have thought hours count but they actually don't and vice versa. You definitely want to work with someone that's intimimately familiar with the tax laws in this area. I'd recommend reaching out to a few people that comment actively on the forums or even using the tax pros feature.