All Forum Posts by: Cole A.
Cole A. has started 4 posts and replied 54 times.
Post: 20% deduction for rental income!
- Overland Park, KS
- Posts 55
- Votes 12
For the sake of discussion. This is the TurboTax QBI page, at the real estate asset level. Choose yes or no independently for each property.
Post: 20% deduction for rental income!
- Overland Park, KS
- Posts 55
- Votes 12
Originally posted by @Eamonn McElroy:
You're conflating multiple rental properties with multiple trades or business....and software like TurboTax that's struggling to implement these changes isn't helping.
The QBI determination is made on each trade or business. Not each rental.
The rules surrounding IRC Sec 199A are intricate and complex. 2018 might be a good year to get some quotes from a tax CPA/EA.
I foresee a lot of 2018 amended returns in a year or two that were DIYed via TurboTax et al.
I don't doubt Turbo Tax and the like have kinks to work out. I just read an older mudslinging thread talking about that. Nonethless, I'm not conflating a business with a rental, though. The only place in Turbo Tax to elect QBI is within each real estate asset. And when you elect yes or no, it is only applying to that particular assets loss or gain. Not the other assets. So are you telling me they put the QBI election in the entirely wrong section?
Post: 20% deduction for rental income!
- Overland Park, KS
- Posts 55
- Votes 12
Originally posted by @Natalie Kolodij:
You can't pick and choose. You need to apply the same 162 test to all or none. You can't pick and choose. Either you're treating them like TB or you're not.
Technically you can pick in choose in Turbo Tax (and probably the other software). Perhaps they should be locking it down to all schedule E properties or none. But then you get in to complexities where you're only a minority owner on a particular property and you have no interaction with anything related to the property.
Post: Real Estate Attorney Recommendations in Columbia, MO
- Overland Park, KS
- Posts 55
- Votes 12
@Sharrod Greene, unfortunately I don't have an RE attorney contact in Columbia. However, I grew up in Columbia, so I had to comment :)
Post: 20% deduction for rental income!
- Overland Park, KS
- Posts 55
- Votes 12
Originally posted by @Basit Siddiqi:
@Marcus Auerbach
Since many rentals operate at a loss, it may actually be disadvantageous to have the rental income to be classified as Qualified Business Income.
Exactly. Just ran in to this situation. Is it acceptable to selectively take QBI on some, but not all, of your rentals?
QBI deduction is taken at the individual property level. Supposed you have 10 rentals on your schedule E. Five of them show a net gain for the year, five of them show a net loss. You then go and elect QBI deduction on the 5 properties showing a gain. Your tax liability has now dropped, because 20% of that gain is no longer taxed. GREAT. But then, you go elect QBI deduction for the five properties showing a loss. Your tax liability has now gone back up, because 20% of that loss is no longer being counted towards your losses. So the question is, can you "properly" take QBI on your rentals with a gain, and skip the QBI deduction on your properties with losses? Seems sketchy, however the deduction is meant to help property owners, not hurt them.
Post: Self managed landlords, do you give tenants your cell?
- Overland Park, KS
- Posts 55
- Votes 12
Originally posted by @Peter Stewart:
I used to. Big mistake. Nothing worse than getting texted a million times by tenants about stupid stuff. At night. On weekends. Holidays. Etc. Don't do it.
I self manage my properties. After a bad tenant eviction, and a lot of reading on BP forums, I've decided to distance myself as the owner. I started a property management company (which is easy as registering an LLC, opening a bank account, registering a website, and setting up gmail and google voice accounts).
So, I can now introduce myself as the property manager (since it's true). And, I can give out a separate email and phone number (and only have 1 phone).
Problem is if you use traditional financing and they are halfway aware of how the world works, they can tell from city/county website who the owner is.
Post: FHA Owner Occupied Requirements
- Overland Park, KS
- Posts 55
- Votes 12
Originally posted by @Rochelle G.:
I'm sure everyone replying to your post means well, but this is something to consult your actual lender about. I currently have an FHA loan and would recommend it to anyone looking to get into a property quickly. However, you need to be willing to take a year to settle in and use that time to save. Once you pull out an FHA loan, you cannot take out another without refinancing out of the first. The only 2 conditions where that isn't the case is 1) Your job requires you to relocate greater than reasonable distance or 2) your family outgrows the home. Again, it's a great program, but you do need to be able to come up with your down payment for your next deal since that 3.5% is the lowest you'll ever be able to bring to closing thereafter. However I‘m assuming you plan to finance traditionally on your own.
FHA is a federal loan program...the 12 month occupancy is the requirement in the paperwork, it is not lender specific...
Originally posted by @Aaron Winters:
I got some clarification on this one: was bought at the auction sale but is in midst of the redemption period. Previous owners are still in the house attempting to sell before this time runs out.
So could you get conventional financing on a house in the redemption period?
Post: FHA Owner Occupied Requirements
- Overland Park, KS
- Posts 55
- Votes 12
The paperwork/deed/mortgage signed at closing for FHA/owner occupant financing explicitly states required occupancy within 60 days, for a minimum of 12 months occupancy before non-owner-occupying status, as Chris stated above. In terms of legality and contract law, doing anything other than stated terms would be breach.
That said, you have to decide if you're going to "follow the law".
Post: Closing Cost - Property Taxes
- Overland Park, KS
- Posts 55
- Votes 12
Originally posted by @Jason D.:
Same principal as insurance. You pay the full year premium at closing, then immediately are paying in to escrow for the next years bill.