All Forum Posts by: Joshua Thompson

Not a silly question at all but the answer depends on a few factors. If I assume this is a rental property, your income isn't over $150k, and you're not a real estate professional then the losses the rental property generates could offset other income up to a certain amount. 

This means you'll want to "write off" expenses related to a property you have in service because if those expenses don't benefit you this year they could in the future once you sell the property.

We can get into a lot more details with the "if" "and" or "buts" BUT I think this would be the "simplest" answer without diving into your specific situation here.

I hope this helps!
 

Yes typically you'll file the wholesale activity on a schedule C unless it was done in an entity (S Corp, Partnership, C Corp) but I see above you don't have these. If you've been active in this business and actively pursuing a profit during the year, the loss the business generates could help offset other income on your tax return. 

If you would classify this as more of a hobby which most people won't the first year, then the losses won't benefit you. Ignore this part if you're trying to make a profit with your wholesaling business.

Hey Sam, 

Welcome to the forums! I'm not sure of a tax professional in Virginia or Washington D.C. but I do know there are many great accountants here on the forums answering questions often. Most of them work with clients across the country and I would recommend reaching out to a few you see active in the forums. If you can't find one that is a good fit for you, Biggerpockets has a "Build Your Investing Team" feature to match you with a tax professional but not all of them are active in the forums. 

If you're a part of any investor groups it also helps to ask for a referral while interviewing tax professionals. 

Good luck!

Great question! Based on the purchase price, closing cost, agent fees and certain other items you will calculate (capitalize) a total number. A percentage of this number is then used to determine what portion is related to the ADU vs the portion of the property you're using personally. This will determine the depreciation amount. Typically it's better to have the seller pay the buying agent because that amount if you paid it would still need to be capitalized and won't be expensed entirely in the first year.

Hi Andres, 

Congratulations on the first property and businesses! I would recommend connecting with a few accountants you see active in the forums. Most of them are knowledgeable regarding real estate tax implications. 

You can also use the "Build Your Investing Team" feature here on BP if you're unable to find an accountant in the forums currently accepting clients. 

I recommend interviewing at least 2 to find one that will be a good fit for you and your current situation. 

Good luck and welcome!

 You might be able to treat it as business income if its substantial enough. It would be a great conversation to have with your tax advisor and financial advisor for the solo 401k. 

Depending on how much you'll like to contribute to this retirement account keep in mind the self employment taxes you may need to pay of 15.3% and age if contributing to a traditional not roth type retirement account.

I agree with the above based on your answer you most likely won't have issues in FL.

Hi Glenn, 

Typically hard money lenders depending on their situation and if they do it as a business treat the income as interest income or business income. Now there are a lot of factors that can come into play but I'm not completely sure what you're asking here. Are you the hard money lender? Do you have any other involvement other than providing funds? 

Hi Dominic,

I believe other forum users who don't practice tax can send you recommendations, I'm not 100% on this. However, you're more than welcome to reach out to a few accountants you see active in the forum to see if they are taking on new clients.

You can also use the BP feature Build Your Investing Team, which will allow you to find a tax professional on the platform. I believe this feature is completely free to you.

I hope this helped!

As you mentioned, you can take losses from stocks, but your capital losses can only exceed your capital gains by $3,000. Once you're at a $3,000 net loss, that amount can offset other income as an adjustment on your tax return. 

If you're asking about loss harvesting with real estate as the asset, you can typically only loss harvest when you sell an asset, unless you sell that property and it has a loss, keeping in mind depreciation, you won't be able to loss harvest.

Hi Larry and welcome to the forums! There are several knowledgeable tax professionals here that would be able to help you. I'm not sure of one in Milwaukee but I do know the majority of the tax professionals here run a remote office. I would recommend reaching out to a few you see active in the forums answering questions or us the "Build Your Investing Team" feature that should be at the top of the screen if you're on a computer.