All Forum Posts by: Bruce D. Kowal
Bruce D. Kowal has started 37 posts and replied 273 times.
Post: I own the business and the building (2 LLCs)
- Metro NY + New Bedford
- Posts 276
- Votes 199
Quote from @Jon Taylor:
Thanks for your input! That's helpful.
I was thinking that because the rental income is depreciable, and the mortgage interest on the investment property is not a deduction, it may be beneficial to show as much rental income as possible.
Regardless of whether title to the building is held by an LLC or by you, as an individual, both depreciation and mortgage interest are fully deductible and flow through with the same characteristics to your tax return. But you state that you own a business. In what form do you do business? As a Sole Proprietor? As Sole Shareholder in a Corporation. Could be important . . .
Post: How to find a good CPA with real estate experience?
- Metro NY + New Bedford
- Posts 276
- Votes 199
Quote from @Chris K.:
How do you find a good cpa in your state that has solid real estate experience?
Any websites? Resources to find them?
Go to the webpage of the State CPA Society. There will be a Real Estate Chapter. Many Members to choose from. Look at their profiles. If they are publishing articles and giving talks, they are keeping up to date.
Post: Carry over losses for doing taxes
- Metro NY + New Bedford
- Posts 276
- Votes 199
Quote from @Krista Manna:
Because I purchased a property in 2020 and then sold in 2021, my 2020 taxes had a loss listed on them (both for the business and for my net income). I'm trying to figure out where to list the loss carryover in Turbotax? I have multiple businesses. I first listed my loss that was listed on last years taxes for the flip business as a loss carryover in this year's flip business. But now I've found a section that talks about net loss amounts. Is that where I'm supposed to put it? The business had a "loss" of 40K but the net loss for all my income in 2020 was 15K. Which number do I use? Without putting the loss in it makes it look like I made 40K more this year then I actually did on the flip. Without putting a loss in, the software was claiming I owed the same amount in taxes that I made on my flip so ... that's not right. I realize this might be an accountant question but they were all booked in my area until May so I'm muddling through doing it on my own one last year.
If all the CPA's are tied up, file an extension by April 18. IRS Form 4898, M-4868 for the Bay State. Would need to see the 2020 return to make head or tails of what you are describing. If you sold in 2021, this is what is known as a Sec 1231 loss and is reported on Form 4797. Now, that is pure gobledygook to you at this time. As for your taxable gain on the flip, here's a back of the envelope calculation: Take your cost plus all improvements and subtract that from the sales price. Use the closing statements for the purchase and sales. Add your closing costs on the purchase to your costs. That will get you in the ball park for a long-term capital gain. You may want to overpay a bit with the extension so that you are not caught short with the correct balance due when you file. Failure to pay by April 18 penalty will run you 0.5% for IRS, and double that, 1% for the Mass DOR. Monthly.