All Forum Posts by: Basit Siddiqi

The property has to be considered 'in service' for you to list it on your tax return.

In service entails a couple of items such as
1) The property is in livable condition - Working bathroom, kitchen and an area to live.
2) The property was advertised for rent.

Best of luck

An accountant is a general job title that may potentially do one of many different tasks(bookkeeping, reviewing financials, assurance, taxation, etc)

Bookkeepers are specific that they will likely only do the bookkeeping.

You may be required to make estimated tax payments when the property sells.

It depends on what your 2024 total taxes due were and 2025 estimated total taxes / withholding / estimated payments are.

If you pay in atleast 90% of the current year tax or 100% / 110%(Depending on 2024 income), you are normally considered good.

You may want to consult with an accountant for more clarification.

I would sell the stock to pay off the mortgage.

You likely have to make a 11% return(pre-tax) from your stock portfolio to make the 8.125% interet payment.

I.E. If your interest payment is $8,125
Your stocks have to make a dividiend of about $11,000 of which you would prolly pay 15% to 25% in federal / state taxes / NIIT.

Assuming you will make a 10%-11% return is not guaranteed.

You will also feel good about having a paid off property(relief).
Furthermore, your credit score may go up with a paid off property.

Best of luck!

You should consider making an investment in an area where you have a competitive advantage others. I.E. you know the area better than others.

Is there a short-term rental market where you vacation at, where you went to college or where you grew up in?

First - Calculate what your expected rate of return is. Do you want a 5% return or an 8% return.
Second - determine what the rate of return will be from ownership of this property(Both cash-flow and appreciation).

Is the second number larger than the first number?
If yes, then purchase the property.
If not, do not purchase the property.

Determine what type of property you want to buy - What Zip code, what condition homes, price range, etc.

Contact 3-4 realtors that helped buyer agent buy the type of homes you are looking to buy.
Then go with the 1 realtor that you connected with the most.

This works with any type of appreciating property such as real estate, stocks, etc

Depending on the appreciation rate, you can potentially see asset values double every 7-14 years.
Likely around 7 years if the appreciation rate is 8%
Likely around 14 years if the appreciation rate is 4%

If you buy something for $100,000 and it appreciates to $200,000, you can potentially take a loan on the $100,000 appreciation which would not be considered a taxable event.

However, be mindful that you are paying interest on the loan and you have to payback the loan but yes, it would not add on to your taxable income.

How are you recording your expenses?

Regarding discussing expenses, you likely want someone to chat with during the year to see what is deductible or not.

For example, if you are taking a trip to Minnesota, you may have a question regarding deductibility of travel costs such as flight, hotel, car rental, uber, etc
It would be best to work with a professional to speak to about expenses as you are incurring them instead of after the year.

Being able to use real estate to offset taxable income requires some sort of participation on his end.

If he wants you to be the boots on the ground, it will likely be hard for him to reduce his taxable income.