All Forum Posts by: Ahad Ali

Hello @Austin Janiszewski

You most definitely can turn your residential property into a rental but you must make sure your following the correct guidelines and regulations for your location. 

You will have to ensure you keep your expenses in order since you can not claim the expenses pertaining to the unit you will occupy as business expense. Only the units being rented out can have their respective expenses claimed for your taxes.

I would highly suggest speaking with your CPA before finalizing your decisions to find the best option for you.

I would suggest having longer discussions with some of the CPA's you have already spoke with who you believe may be a good fit for you or even new CPAs. A short discussion is usually not enough to give out proper, tailored advice as there is so much information that would need to be talked about. I suggest browsing around this forum for potential CPA partnerships as they may be able to assist you greatly.

There shouldn't be any issues with either registering the LLC in MO or having yourself as a member. As the LLC and Corporation are separate entities it shouldn't have any effect on each other aside from the loan from the Corp to LLC. As for any additional tax information, that would be difficult without more information so I suggest to just speak with your attorney and CPA as they can provide the best advice for you.

@Jane Ng

LLC are flow through entities meaning any profit/loss goes straight to the owner(s) via K-1 and they will need to pay the taxes accordingly on their personal returns. If you house all the LLC under a single LLC then essentially you only need to file one LLC return because all the revenue and expenses would get compiled into a single return of which the K-1 would go to the individual owners. Please do speak with a CPA regarding this if you want to venture down this route to get a more concrete idea and advice.

Since the LLCs are operating in different states then you will need to file a return for those states respectively. Each state also has their own minimum fees that may need to be paid and they can vary greatly. Please discuss this with your CPA in detail as well 

It is very circumstantial and whether the price is fair or not cannot really be decided without more information. Some CPA's may charge for each individual return they have to file so even if its generating your K-1 from 3 different properties, that may still be 3 separate returns they need to prepare in order to get each K-1. How much work goes into each of those returns to prepare them is directly related to their fees.
Other CPA's may offer somewhat of a package deal for all of the returns depending on the workload.

I would suggest browsing around and discussing with other CPA's to see what their fees tend to be after discussing in detail regarding your returns. Then you can decide whether to remain with this same CPA or change to a new one.

@Yan Gao

To answer your question regarding filing separately, you can. Each of you will need to show that you lived at separate locations for at least 6 months of the year. As for the properties, if only one unit is being rented out then only that units worth of expenses can be claimed. For example if you have a 2 unit property and rent out 1 unit while living in the other, the expenses for the rented out unit can be written off as expense but the other unit can not as it is personal use.

As to which route would be better for you to file as, Joint or Separate, I highly suggest speaking directly with your Accountant/CPA as there would be more variables to discuss about before deciding which would be the best option. Its rather difficult to advise which route solely based on what was provided on this forum and you can not go into further detail here.

Keep in mind this forum is for general advice and you should not move forward solely with the information found here without speaking to a professional first as they will know the details surrounding you and can provide more tailored advice. 

Sometimes you can find someone out of state who you can work remotely and have experience in that particular field that you're looking for.

You can browse around to look for a CPA who could help you with that also don't just rely on one, you could speak to multiple CPA.

Hi Yan Gao,

Yes, you guys can file a joint return as long you put the same address because technically in 2020 you guys lived together and you guys are planning to buy the house in 2021. For the Phoenix, AZ house you guys can show the rental deduction for the 2021 tax return, and for the 2020 tax return, you can't deduct anything as you guys will purchase in 2021. And, if you guys file a Separate return in 2021 then both of you can't show the Phoenix house in the deduction, only your wife can show the deduction but if you trying to file jointly then yes technically both of you are showing the deduction.

You can always do a google search. Don't rely on only one investor. Try to speak to different investor or accountant who can help you to reach your goal.