All Forum Posts by: Jeff Nash

Assuming your rental activities are considered a trade or business (many court cases address this issue), you would likely benefit from the home office deduction (Form 8829) and be able to deduct the prorated amounts of mortgage interest, property taxes, utilities, depreciation, etc. based on the proportion of your home office square footage to the total square footage of your personal residence.  I'm assuming obviously that you have a home office and dedicated area used exclusively for business (i.e - not a common area like a dining room or living area where you just happen to work on real estate activities). 

In most situations you are limited in your ability to deduct personal expenses as business expenses unless your are able to recharacterize them like in the home office scenario. There are other things you could do with your home to some extent, but that depends on your overall situation (i.e. - are you a W-2 employee with 4 rentals or self-employed and/or a real estate professional).  

As was noted on this thread, changing the ownership of your home into an LLC does not help you and actually may cause other issues.

It sounds like you are describing a series LLC. If that's the case, I would just work with an attorney to include the proper verbiage in a company or operating agreement to ensure it is set up properly. This would be state specific as an LLC, so the language needed or set up might be different depending on the state or states you operate in. For banking purposes you also want to ensure you are maintaining the integrity of the transactions and keeping them segregated.

Hi Nick, I am familiar with the structure and set those up for clients. The way I read it the LLC was outside of the IRA as an investment holding company (not owned by the IRA) being invested in by the self-directed IRAs. Basically a self-dealing situation.

"Traditional IRA buys all C-shares and Roth IRA buys all P-shares of the LLC."

This appears to be a prohibited transaction - https://www.irs.gov/retirement....

You have made quite an effort to outline the fact pattern and I would have to study it further, but I think this is an issue if I understand it correctly.

If you have any other questions feel free to reach out.

Thanks!

 

Hi Khadija, I have experience with the tax compliance and sponsors of QOFs.  Feel free to reach out to me if you would like to discuss your situation further.

Hi Michael, if you want to chat feel free to reach out to elaborate on your situation and I can see if I can help directly or find someone to suit your needs.  Thanks!