All Forum Posts by: Fulton Sanchez

Hi @Matthew Waggoner, it looks like you're at an interesting stage with your properties and the new LLC. Handling the tax implications of loan consolidation, REP status, and potential cost segregation can be complex. Many investors find it very helpful to speak with a CPA experienced in real estate in these situations. Even a brief consultation could give you clarity on how to proceed and optimize your deductions.

@Jonathan Thomas Hi, 1031s defer taxes on investment property reinvestments. Your California house might have a big primary residence capital gains exclusion, Nebraska is likely taxable. 1031 rules depend on investment use and the equal or greater value generally applies to what you sell. Selling both complicates things.

For specific guidance on your situation and taxes, you've come to the right place. There are more than 20 experienced CPAs on BiggerPockets who can help with 1031s and real estate taxes. Please email them directly for expert advice and they can give you the clarity you need.

@Morgan Painter Hi, I see you're looking for concrete numbers on the capital gains from your second home and are waiting on info from your CPA. Smart to plan ahead. 

Generally, there isn't an automatic capital gains exemption on a second home just for owning it for two years. It's very likely you'll owe taxes on the gains when you sell. To get precise figures and understand how this applies to your situation, you've come to the right place. 

There are over 20 active CPAs here in BiggerPockets assisting RE investors with their tax planning. Make sure to reach out to one with real estate experience, and they can give you the solid numbers you need. Please email them, as we are not allowed to self-promote.

Hi Tyler, That’s a really tough situation — sorry you’re going through it. When a 1031 exchange fails, the tax liability can be significant, especially if the timeline or identification rules were not followed precisely.

In situations like this, it often helps to have a third party review the full communication trail and timeline between the exchange agent and legal counsel. Misalignment between professionals happens more often than people think, especially when roles and responsibilities aren’t clearly confirmed in writing.

You might consider speaking with RE tax pro experienced in post-1031 tax consequences to see if there’s any room for relief or mitigation, depending on how the transaction was structured. Sometimes there are still planning strategies that can be applied — but timing is key.

Hi Andy, you're asking a great question—this is a common area of confusion with 1031 exchanges.

In short, the IRS requires the use of a Qualified Intermediary (QI) for a valid 1031 exchange. If the seller has actual or constructive receipt of the proceeds (even if just wired to a separate bank account), the exchange can be disqualified, triggering capital gains tax. So yes, in almost all cases, using a third-party QI is not just recommended.

The $1,000 fee you mentioned is a typical cost range. It’s definitely wise to shop around, but also make sure the QI is experienced and reputable—mistakes in these exchanges can be costly down the line.

If you're navigating a sale and aiming to structure everything properly from a tax standpoint, it's great that you’re asking these questions early. Depending on the details (like how the gift was structured or your cost basis), there may be other tax angles worth discussing too.

You've come to the right place. There are over 20 active CPAs here in Biggerpockets assisting RE investors with their tax planning. Make sure to reach out to one as we are not allowed to self promote.

Savvy, hi. Forming an LLC in Wisconsin may simplify compliance for that property, but you'd likely need a registered agent there. On the other hand, forming in California (your home state) and registering as foreign in Wisconsin could mean higher fees due to California's franchise tax, but might make things easier if you manage multiple properties across states.

It really depends on your long-term plans and how you want to handle taxes and reporting. 

Raven, hi. You've come to the right place. There are over 20 active CPAs here in Biggerpockets assisting RE investors with their tax planning. Make sure to reach out to one with real estate experience. Please contact them as we are not allow to self promote.

Hi Timothy, You're asking all the right questions—great to see you're planning ahead.

1. If you have 20%+ for a down payment, a standard mortgage is your best bet.

2. Buy in your personal name first—most banks won't lend to LLCs for residential mortgages. You can always transfer to an LLC later if it makes sense.

3. More than a good software, is better for you having support with bookkeeping or taxes can save time and avoid costly mistakes.

You’re definitely not alone—this is the best place to ask advise, we are over 20 CPAs with RE investments experience

Hi Dawn, you've come to the right place. There are over 20 active CPAs here in Biggerpockets assisting RE investors with their tax planning. Make sure to reach out to one with real estate experience. Please contact them as we are not allow to self promote.

Angel, hi. Great question—this is such an important step. Choosing the right structure (like LLC, S-Corp, etc.) really depends on your specific goals, how you plan to operate, and your income expectations. Both legal protection and tax efficiency can vary a lot based on that. It's smart to consult with a CPA who understands both entity structures and tax strategy. A quick conversation can go a long way in setting things up right from the start.