All Forum Posts by: Jeff Nash

@Shabana Dean

Feel free to message me with more details and I can see if I'm a fit for your situation.  Thanks!

@Eric Narciso

I would like to know your situation a little bit better but I can help based on the areas you described.  Feel free to message me.  Thanks!

I with @Jeff Copeland.  The wild card is the quality of someone's books and records too, as if they are not in great shape or well organized that drives the cost way up. When you are a new the initial tax return takes longer because of updating the fixed asset listing and carryforwards.  Occasionally prior year mistakes are identified as well and you have to assess the situation and determine how to handle.  With all this said, you are probably looking at a few thousand dollars just for the preparation/compliance work based on your description of the situation.

The real value is the collaboration with a good planner where you are essentially making an investment rather than incurring a cost.  I hope this helps.  

@Daniel Murphy

What is your contribution to this joint venture?  Financial contribution, providing services, both, and what is the nature of the investment (long-term hold, short-term flip), etc.  Are you listed on title?  I would just memorialize in writing what you are doing with the other party so there is no misunderstanding.  If it's a long-term investment reported on Schedule E you can just report 50% of the items.  If it's more of an active operating business arrangement they can just 1099 you for services or your net profit-sharing interest.  You have flexibility.  

Hi Kenlyn, congratulations on completing your degree but as you know the learning never stops, so that's why you are on BP.  Just ask a lot of questions and listen and note the pros and cons of various suggestions and recommendations you'll receive.  I am curious to know more of the details about your primary business operations and how you plan on structuring that from a legal, accounting, and risk management standpoint. I have a commodities background so that's why I am asking.  Feel free to connect and reach out.

@Dilini Sundaram

Based on the fact pattern you presented it sounds like it might be a good option.  You would be recharacterizing passive to active income with the use of a management company.  I don't know where you stand, but if you are in a higher tax bracket a C-Corp, which is currently taxed separately as a stand-alone entity at a lower historical statutory rate (21% versus 35% since 2018), might be advantageous. Basically, you can get a management fee deduction on the LLC side at a higher rate and pick up income at a lower rate with the management company.

I assume your CPA and/or a good attorney will do what's in your collective best interest and go through the pros/cons of entity selection.   

@Melissa Koon

I would use reasonable methods to determine the breakout of the cost on the invoice between those components if you can't get the company to cooperate.  You also have bonus depreciation, 179 expensing, and this exception as well:

Small taxpayer exception for eligible building property

Qualifying small taxpayers can elect to deduct the cost of improvements made to eligible building property (Regs. Sec. 1.263(a)-3(h)). Qualifying small taxpayers have $10 million or less in average annual gross receipts for the three preceding tax years, and eligible building property includes a unit of property constituting a building, condominium, cooperative, or leased building or portion of a building with an unadjusted basis of $1 million or less. To be eligible for the exception, the total amount of repairs, maintenance, and improvements for the property for the tax year may not exceed the lesser of $10,000 or 2% of the property's unadjusted basis. If the total amount paid exceeds the safe-harbor threshold, the safe harbor does not apply to any amounts spent during the tax year.

@Taylor Michels

@Daniel Johnson noted some challenges you might encounter (location and breadth of investment options) and potential resources.  If you want to chat feel free to reach out to me as well as I might be able to help despite the geographic difference.  

@Al Jecius

There are a lot of good takeaways from the previous posts.  With investing you are obviously trying to balance asset class correlations and sync your overall portfolio with your risk tolerance, investment objectives/goals, time horizon, etc. which is unique to you.  Generally real estate and alternative assets such as commodities share space with the more widely held traditional investments (stocks, ETFs, bonds, etc). If you are interested in investing in alts feel free to reach out as I have a few resources I can share and/or point you to other knowledgeable peers.   

  @Steve Tse

We custody many of our clients at Interactive Brokers which currently is offering 4.08% just for sitting in cash (no money market or CDs).  On the flip side, they also have one of the lowest margin rates for use for investing.