All Forum Posts by: Christopher Smith

Ok I see a little more clearly what the facts are now. Maybe you can make the case that there is a class of improvements that were in effect common improvements that benefit the property as a whole. This notwithstanding the fact that they might otherwise be seen as more associated with one side than the other.

It kind of sounds a little like a tax result driven determination which could be seen as reaching by an auditor. In any event, at its essence its a highly factual call so I'm not sure you're going to find much on point for comparative purposes without some real digging, and then maybe not even then.

If it were me I'd just make a risk assessment determination and then be prepared to defend my position on audit if I made the call to go forward with that treatment. 

Did you expense the improvements made specifically attributable to the rental portion when you reported your rental income on that portion of the property, or did you capitalize those costs and depreciate them?

I was the general partner in charge of all final decision making for a family partnership. Ever heard the expression no good deed goes unpunished? 😂

We actually made a bunch of money, but beware relatives can get weird when money is involved.

All of my properties are profitable AFTER depreciation, that is the way it should be if you are doing things correctly. It means that you've made a sound economic analysis and your profits are high enough to make money AFTER all the tax benefits. That's good not bad.

Anyone who tells you to intentionally acquire inferior properties that lose money just so you can save a few cents on the dollar in taxes on that money lost is an utter dolt. 

Alibaba has dropped from about 320 to where it is now. I've skimmed a few additional shares recently around 225 and will add progressively larger amounts at lower levels. Of course I've been in BABA for a few years now, with original shares in the 60s, added more in the 130 to 150 range on the major dips a couple or so years ago.

I'm not particularly concerned by the Govts fine, to me it's just Beijing's way of showing who ultimately has control. In my opinion China has no interest in crushing it's crown jewels, just making sure they know who is boss.

Yes you guess right on VIPs, I picked up additional shares at 25. I have a long history with VIPs as well, I bought it shortly after the IPO at 5 and sold it at 275. It crashed after that meteoric rise (fake accounting scandal asserted by a short seller) so I bought back in 5 to 15 range (10 to 1 split adjust) after the crash and had ridden it back up to 46 and added more modestly last month on the panic sell off.

Having said that, I invest in China because I like the Chinese play a very long game. It's a very highly volatile market so before you make that dive you better know what you are getting into, it's certainly not for the feint hearted. Most folks would say BaBa is better for some one new to China than VIPs. VIPs is a small fish swimming in a sea of killer whales, very intense competition and generally modest margins aren't very friendly waters. They also received a fine from Beijing recently, but it was very modest.

I made over 1m on VIPs the first time around, so I can take the risk on that one (note I am holding significantly lower holdings this time around - less than 2000 shares). Whether you should invest in VIPs is up to you, I would neither encourage nor discourage it.

If I have a larger 401K Rollover IRA with mostly, but not all Pre Tax money is the Pro Rata rule avoidable? Does it make any difference if I have a separate current employer plan that I could roll those 401K Rollover IRA funds into?

I don't have any plans to establish a Solo 401K.

I'd be interested in knowing if there is a way to avoid this as well.

Great: 

Let's all hit the Kitty 🐈 Cat Club.

Form 8824 is filed in the year of the exchange.

Might be just a bit late to start 2020 tax planning in earnest. 

I invest primarily for capital appreciation when I invest in both stocks and real estate. Depreciation shelters about half of my rental property cash flow, all underlying rental property and stock appreciation goes currently untaxed. So I end up being taxed on 15% to 25% of my yearly change in net worth (primarily W-2 earnings and rental cash flow after depreciation). The few high dividend/distribution stocks I own (e.g., REITs), I hold in an IRA.

I don't shoot to totally eliminate my tax liability by affirmatively attempting to lose money, that's a fools game. Real economic profits always come first, tax planning second.