All Forum Posts by: Christopher Smith

Are using software to prepare your return? That would likely make it easier, just provide the basic plan inputs and it will generate all the required forms and supporting schedules. If you plan on dealing with passive losses it's almost a must especially when you start to scale.

Delaware Statutory Trust arrangements might fit someone in his circumstance. They can provide  income tax deferral and a step down from active to passive participation. Depending upon the dollars we are talking about potentially an element of diversification as well. They often do have very high internal fees but some folks are ok with that burden, personally I'm not.

I have a number of CA properties that allow me (because of high upfront cost) to use the 2% of original depreciable property's basis safe harbor rule to expense many significant HVAC repairs/replacements that would otherwise need to be capitalized. How much did you pay for the place? If you can't fit it under that regime then it sounds quantitatively and qualitatively like a SFR item that would probably require capitalization.

Someone's getting rich 🤑

Well Pilgrim; it might actually be better to ask for an attorney referral, since providing specific advice on the drafting of a legal document sounds suspiciously like the practice of law.

If its actually inherited property (passes through the tax estate) then it currently receives a step up in basis so there would be no gain for any pre-death appreciation.

I've used a simple one page spreadsheet for 20+ years for multiple rental properties in multiple states, and I'm not even the least little bit concerned by an audit. Now I've never been audited (whether you see that as good or bad), but to me I don't think that is really the point. As long as your business accounts are kept separate from your personal accounts, and the processes that you use to record your activity are clear and consistent, I see absolutely no need for an elaborate set of financial statements. In fact my spreadsheet is much more tailored to tax reporting than financial reporting so its much easier to work from for tax compliance purposes than it would be to work from a set of financials.  

Just my opinion.

Right and we would definitely not have renewed the tenant regardless, but the PM was worried that if the tenant just decided to up and squat we might have a problem. Primarily because even though the reason for eviction would have presumably fallen outside the local Covid protections, the law is largely untested and the courts might construe it very liberally in favor of the squatting tenant all things considered. 

Additionally, the court dockets in many jurisdictions are way behind so that creates another practical if not legal barrier to a timely eviction.

I think you are in uncharted legal waters. I had a tenant up for renewal recently and I had essentially the same question because it's the only tenant I have ever had that I knew I wouldn't renew and my PM was very worried they might not leave using Covid as justification.

Thankfully for us they left voluntarily, but if they had not no one really seemed to know for sure if we could have evicted because of local Covid restrictions.