All Forum Posts by: Jake Drum

I've had clients add me as a collaborator on their properties in Stessa, and some that just send me the tax package report, both work perfectly for preparing taxes. Being added as a collaborator can help more with strategy and bookkeeping questions.

 In my opinion it is a great RE specific alternative to something like QuickBooks (especially with recent price increases to QB). I agree with other comments though, that it should not be the main criteria for selecting a CPA.

That is probably a valid consideration. There was a lot of new multi-family housing being built last time I was there (roughly 6 months ago). 

I'm in Birmingham, and we are jealous of the growth Huntsville has had. I am bullish on the future of the rental market up there. 

@Jason Watson Thank you - and thank you for your incredible blog at https://wcginc.com/. It was an incredible resource for me early in my career, especially on the topic of S-Corps.

Basically all expenses that occur before the property is placed in service must be capitalized. That would include items being expensed under the De Minimis Safe Harbor. 

If you have a Certificate of Occupancy dated before the purchase of the appliances you could use the date of CO as your PIS date, IMO. 

Yes, De Minimis Safe Harbor expenses can create a NOL.

Tim, reading through your post, and you mention being interested in STRs. STRs do not require you to be a REP in order to take losses against ordinary income. You only have to materially participate in the activity. There are 7 tests to determine if you materially participate (only need to meet one) the most commonly used tests are:

• 1. You participated for more than 500 hours, or
• 2. Your activity substantially constituted all participation, or
• 3. You participated for more than 100 hours and more than any other individual.

I have helped some clients set up Tiller to track their real estate and personal finances. Tiller uses bank feeds to pull all of your bank and credit card transactions into Google sheets or Excel. It is not as easy and intuitive as Mint and Monarch, but I think the ability to customize it however you want is worth the trade-off (if you like spreadsheets 🤓).

I doubt TurboTax would let you attempt a 3115, but maybe. 

If you want to change to cost seg allocations in 2023, the 3115 essentially calculates what amount would have been taken in prior years had the cost seg allocation been used for those years, then it backs out what was actually taken to arrive at the catch up amount (called a 481(a) adjustment). You get to deduct the full 481(a) catch up amount in the current year.

1. No you can file the 3115 with your 2023 return

2. It falls under the automatic consent procedures, so it does not need approval - it could still be audited though 

3. Form 3115 prevents you from having to amend prior year returns

4. I am sure plenty have tried to DIY it 

When you say only a JV and not a new LLC formed do you mean you are both on the title as tenants in common? This would require you to each report your share of the activity (depreciation included) on your individual tax return according to ownership %.

If an entity holds title and you and the other partner own % interests in the entity than you can specify special allocations that are different from ownership % in the partnership agreement/or operating agreement (assuming the entity is taxed as a partnership, and not electing to be taxed as a corporation/s-corp). The special allocations must have "substantial economic effect" (essentially meaning that cash flow to that partner could be impacted somewhere down the line by the allocation) When you start getting into partnership tax law and special allocations it is probably a good time to loop in an attorney and/or tax pro.

Sorry to hear about your father. 

If they owned the property jointly she should get a step up in basis for his half of the ownership. or if he owned it outright and she inherited it, I believe she would get a full step up.