All Forum Posts by: Joshua Myers

The answer is "IT DEPENDS" - just like most answers to tax questions.

The IRS permits a deduction for business expenses that are "ordinary and necessary" in the course of the business and that enables you to generate revenue.

Some questions I would ask if you were my client:

1.  Do you have a property manager and/or a local repair person?  If so, why are they not able to take care of these issues?  (Necessary)

2.  Do most property owners travel cross country to upgrade furnishings, etc? (Ordinary)

Now, let's assume that you are able to document that your travel expenses there are both ordinary and necessary.  What's deductible?  All of the mileage, travel, hotel and meals expenses for your entire vacation?

No, of course not.

Let's say your trip is for 14 days and you spend 2 full days working on the property.  2/14 (about 14% of YOUR travel expenses - not your children, not your spouse) would then be deductible.

Now let's say your trip is for 14 days and you spend 30 minutes every day working on the property.  Does that make the whole thing deductible?

No, of course not.

The IRS also has a rule regarding "significant personal pleasure" such that travel that has a significant personal pleasure component becomes non deductible.  You're better off dedicating whole days to the property and deducting that percentage rather than trying to extend the work and risk having the "personal pleasure" component come into play.

@Tim Bee what information are you trying to get with this question?

Many of the answers won't be of use to a newbie, due to:

1) Property location, which will affect gross rent amounts. 
There's a HUGE difference in average rents between California & Mississippi properties!

2) Property Class, which will also affect gross rent amounts.
For a specific location, Class A properties will have higher gross rents than Class B, which will have higher gross rents than Class C and so on.

3) How long a property has been owned, which will affect rent - PITI
A property owned for 5+ years will have benefitted from rising rents, while the PITI payment has changed little.

You may be trying to find a number to use in projecting how many properties you need to replace your W-2 income. There's really no guaranteed formula to do this.

 Michael, Because his tax pro might charge a consultation fee to get this answer 😉

@Joshua Myers

Not sure why you ask here if you work with a tax pro specializing in real estate.

Anyway, if you have passive losses in 2021 (no REPS) and qualify for REPS in 2022, only your 2022 losses will be deductible in 2022. Your 2021 losses remain locked as passive.

Intel plans to build America's first chip factory, and possibly the biggest in the world. They are estimated to spend over $20 billion on construction, with some estimates ranging to $100 billion. Construction will take place over the next 10 years. Once completed, it will employ over 3,000 workers with an average salary of $135,000.

Of course everyone is different, but how would you approach this?

1. Local long-term rental and wait on appreciation?

2. Local midterm rental for thousands of transient employees over the next 10 years?

3. Local short-term rental

4. A short-term rental in the nearest weekend getaway spot?

FYI it's not the first in the US as Phoenix has a few Intel fabs already and TSMC is looking to build more there.  Silicon Valley of course earned it's name by manufacturing chips for many decades as well.  That being said, I would leverage Phoenix's growth as an example of what could be possible although there are of course many other factors to consider.

Collin

no offense taken ! How would you go about gaining capital if you don’t mind me asking ?