All Forum Posts by: Sheldon Harding
Sheldon Harding has started 0 posts and replied 14 times.
Post: Who gets a 1099?

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
Property owners that rent their properties to others should be aware of the coming paperwork burden imposed by tax law passes this year as it will soon affect them. They soon will have to gather tax id #s from their vendors and give them 1099 forms at the end of each year. Look at this link for further details.
http://www.journalofaccountancy.com/Web/20103537.htm
Post: $8000 Tax credit and seasoning question

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
All the realtors and mortgage persons, no doubt, are all busy right nowshowing buyers how to finish up getting this credit. The buyers should have extended their tax returns, but if they already filed the 2009 return, they can amend it to get the credit now. Let me know if anyone needs assistance with the credit. I'm happy to gain some new contacts even if it is not immediate business. I want to help owners with their real estate and taxes.
Post: suggestion

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
Joshua,
I think it is a terrific idea as it will be a big 2010 topic since everyone can transfer funds from a traditional to a ROTH IRA and eveyone should start thinking about it. It certainly is a much bigger topic than the HSA topic that I commented on.
It will be a way to buy properties and have no capital gains tax if held until age 59 and 1/2. For those that want to do that, it is a terrific opportunity. :mrgreen:
If you want to know more about how I feel about how important this topic is, you should see the ROTH and IRA topics on my blog at: :D
[REMOVED]
Post: Health Savings Accounts

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
Readers of this thread may want to check out the link at http://www.hsainsider.com/Individual/Benefits.aspx as they claim to be a leading authority on Health Savings Accounts.
In answer to Brian, yes you do have to have a HDHP (high deductible health plan) to setup the HSA. That at least means coverage at the time you setup the HSA. You cannot have other general health insurance (only specifics like dental, vision, long-term care). You can't be in Medicare and can't be claimed as a dependent. So you might have to opt out of your wife's policy for at least a year for yourself to qualify. You should also ask your wife's employer if they will add a HDHP as some may add that with increasing acceptance of the HSA. You can now qualify in December and still get the full year contribution limit.
The annual contribution limits for 2009 are:
Self under 55 $3,000; Self over 55 $4,000
Family under 55 $5,950; family over 55 $6,950. This family coverage assumes only one spouse has a high deductible family plan.
The minimum and maximum deductibles are
Self: $1150 - $5800 with family coverage having these amounts exactly double the self-only coverage. The upper limit is the out-of-pocket expense limit. The insurance company should make sure that you are getting a qualifying HDHP when you setup a SEP. The link above can also help you review these rules and even get quotes and apply online, but likely won't help with the non-traditional investments in real estate. But it could be a good comparison and negotiation tool.
Once you get some money accumulated in an HSA, I don't think they can make you keep that HDHP plan, if you aren't contributing any more, but would have to review that rule further.
Post: Quit Claim and Lifetime Gift tax

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
After circling back to this, there is other ideas that can be used. The uncle does not want to sell it as there would be capital gains. Harry, the donee, doesn't want to owe the uncle's estate later, if possible. A better way may be to contribute the asset to a new LLC, in which the uncle gives membership interests to the donee. That keeps a sale from taking place and then the portion of ownership that the donee has is clear and you can control how much value goes to the donee each year if annual gift tax forms are a concern.
Post: Health Savings Accounts

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
Generally, you need a non-traditional investment custodian that will allow you to keep the funds as an HSA and invest in non-traditional investments. There are many such custodians now.
I agree that the program is good in it's own right with traditional investments. You should likely do the RE investments only in an account that you have other funds available. ROTH IRA's that are self-directed are now the hot topic as it is a way to avoid capital gains on real estate. That is catching some attention and anyone can pay tax and convert IRAs to ROTH next year.
Sheldon
Post: Borrower wants to refinance SFR that is in a SDIRA

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
Darryl,
I know a couple of contacts that might be able to give more ideas on the non-recourse financing if you are still looking, you can PM me. You might also need to know that there is a special tax return due on these deals with debt. I recently did my first return like this. The other things to be aware of is watching the cash flow as more IRA money would be needed if there was a cash shortage. You should also pay down the mortgage at least a year before sale to minimize any potential taxes. It is a little strange, so I am just informing you.
Sheldon
Post: Health Savings Accounts

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
I am surprised that there is not more nationwide interest in this HSA for RE topic yet. I have had recent interest in SDIRA's and realized that the same applies to HSA. I know that at a seminar it was indicated that some doctors had rolled IRA or other money into HSA plans and then were investing them by self-directing. I think it will catch more interest. My clients have not accumulated much in HSA plans yet. But the right to a one-time rollover from IRA to HSA (with limitations) is very interesting as a way to get some funds started. The idea is to start paying for future medical expenses now getting a deduction now and tax-free later when taken out. If you have enough in an HSA then it can be a source to invest in real estate. The challenge might be to have enough funds available when needed for medical expenses.
In answer to Jeffy F.:
I thought I would just make sure your question got answered as I didn't see any response.
My tax book states: "Qualified medical expenses do not include the insurance premiums for your HDHP." It goes on to explain that if you are unemployed or over 65 exceptions apply as well as insurance for LTC within limits. So the insurance premium itself will not work, but if you are self-employed with income, you should get this as an adjustment to income anyway. But an HSA is an excellent way to get your other medical expenses out of the 7.5% reduction. It makes it a huge plus as you can start deducting not only this year's medical expenses, but also future medical expenses. An HSA is better than any IRA plan (when it comes to medical expenses) as you deduct up front like a traditional deductible IRA and it is tax-free upon withdrawal with the only exception that they be used for medical expenses.
Hope that helps,
Sheldon
Post: how do you do taxes

- Accountant
- Aurora, CO
- Posts 17
- Votes 8
Jeff,
I think you received some good replies. My additional information is that the date the property is available for rent is an important date to document. If you advertised for a few months before you rented, save the documentation of the date advertised. You can start deducting expenses, like maintenance, utilities and depreciation on that date before you get rental income.
I could send you a more information if you wish to PM me and start an e-mail conversation.
Sheldon