All Forum Posts by: Joseph Palmiero

You are on the right track. Keep your rentals seperate from your flip LLC. Once you ramp up your flips, you can elect to be treated as an S-corp to help save on self employment taxes.

In theory you could qualify for both.  You would meet the 2 year ownership requirement to qualify for the 121 exclusion.  You would have to recapture depreciation from the rental period and pay tax on that.

You could also qualify for a 1031 since you rented it for 2 years.  You would have to meet the other requirements of a 1031 such as purchasing a replacement property.

CPAs can provide tax and consulting services in all states. Hawaii does require out of state CPAs to obtain a special permit.

If you are looking for a real estate related book, I would recommend The Resident Retention Revolution by Harmon

it is a old one but still has a lot of relevant concepts.

Quote from @Sam Yin:

@Angie Zhang

It is the same as purchasing in your name. I have done several. It has made ZERO difference in the paper work. In fact, I transfered over several into a trust after purchase as well.

Not 100% sure about this, but you just need to be the Trustor, Trustee, or both. Essentially, you are still the guarantor because you need to qualify for it unless you are buying all cash.

May be others may have a different experience.

This is true for most revocable trusts.  Generally, irrevocable trusts require a seperate tax return.  

Sounds Like you will be able to deduct up to $25000 in loses from your rental properties.  This will not impact you standard deduction.  

Quote from @Yelena Korshak:

Thanks for all of the replies! If this is our first STR, then why would it be more difficult?

Also, if we assume it's not a duplex but instead a 2bed/2bath condo, would that change the answer? 

It boils down to the material participation tests. The most common tests to meet material participation in an activity are working 500 hours, 100 hours and more than anyone else, or you work substantually all the hours in an activity.  Unless both of you can meet the 500 hours test then only one of you can meet one of the other 2 tests.  If you had multiple properties then it would be easier for both of you to meet the 500 hours. 

If this is your first STR it would be difficult for both of you to get them.

Quote from @Ash Hegde:

For tax purposes, a single member LLC is disregarded, so there are no tax advantages by using that type of entity vs running a business under your own name without an LLC. It is more for asset protection as Chris mentioned.

I am a CPA and I agree with @Ash Hegde and @Chris Seveney.  LLCs do not provide tax benefits.

Quote from @Ash Hegde:

For tax purposes, a single member LLC is disregarded, so there are no tax advantages by using that type of entity vs running a business under your own name without an LLC. It is more for asset protection as Chris mentioned.