All Forum Posts by: Aaron Zimmerman

Seems like a fun event! Wish I was in town. Thanks for putting this on. 

Cost segregation depending on your situation can make sense. Generally, it's advisable on larger properties. If it's above that and he's not advising you, perhaps there are other reasons such as your income is too high and not a real estate professional. I'd get a second opinion. It's worth the money for sure.

The answer is no. Only items that add to your basis after the purchase are improvements to the property. 

What getting them reappraised will do is allow you to take off more debt (thus likely increasing interest expense) and reducing the income from the property. 

Depends where the money is but I'd be inclined to just invest in your personal name or a trust (I would not set up one just for this purpose). As an LP, your liability is limited to the amount of capital you put in. 

Also depends on your tax situation: i.e. if you're a real estate professional with a high earning income/spouse with a high income (and still REP status), it'd make more sense to invest as an individual. The reason this is is because the syndication usually does a cost segregation in year 1 and accelerating the depreciation forward and you would be able to deduct the losses from the syndication. 

If you're not a real estate professional, then you could offset the passive gains you may have from other businesses with the passive losses from the syndication. 

If you don't have any of the above situations, the losses would still roll from year to year. 

Also - depends too on the states they're investing in too and if you want to potentially file in those states and increase the complexity of your return. 

A good accountant should be able to help you out with all of this. 

I'd be inclined to say you should give them notice now that you will not renew his/her lease. You need to provide this notice anyway and depending on the length of time that he/she has been in the unit, it may be up to 4 months. 

I'd say to ride it out and apply for housing assistance that I believe is coming out from IHDA in a few weeks. You will have to see if you qualify but that would probably alleviate the pressure and make your tenant more cooperative. 

You would probably need to do a cost segregation and keep track of furniture and fixtures (to furnish the airbnb). Depending on level of income/REP status, you may be able to deduct some, all, or none, of the potentially accelerated depreciation. I'd recommend talking to a few CPAs on here and seeing who you resonate with and determining if it's worth it to do a cost seg. 

Typically, you can get larger year 1 write offs due to bonus depreciation of the items mentioned above. 

It's based on the cash basis. Whenever you pay it is when you can deduct, generally speaking unless you're on the accrual. I'd recommend sticking to cash basis if possible. 

You can accrue, but I think you'd be making it too complex/too much effort.

I know Windy City REI has an accountability group. I don't know if that's what you're interested in per say but it may be good to join.

Whatever works for you is ultimately what is best. If you can keep up with the transactions, then that's fine. If not, multiple bank accounts is fine too. Having one bank account would probably be simpler though. 

What state is your property in? That would potentially help narrow down your search. There's a lot of qualified people on here. I'd recommend talking with a few and seeing who you connect well with.