All Forum Posts by: Joshua Thompson

If you materially participate and the rental qualifies as a STR you should be able to take advantage of bonus depreciation on a STR. Keep in mind this year bonus depreciation is 60%. You do not need to have the property in your personal name, it can be owned by an LLC you're sole owner of without having to file a separate tax return.

For the most part yes and depending on what you have going on in life an LLC might be overkill and why I think John gave a terrific answer

Lol yes, so many different opinions right! I don't want to give my opinion to you here based on my experience with clients but I would definitely ask your tax professional on their opinion because you might be surprised by their answer. To clear up things though if you have an LLC just for rental properties you won't get any tax benefits for having an LLC other than an additional expense.

John did a great job answering this! The due on sale clause will be the biggest worry, even though it's uncommon for banks to enforce it, they have the opportunity to at any time. Typically they give you 30ish days to get the funds and in the time you might be able to find a new lender but every bank is different.

Yes you'll still be able to claim the tax benefits as long as you qualify even if the property is in your LLC. Know your tax situation first though because real estate may or may not benefit your tax situation!

Hi Roy! Welcome to the forums. I would highly recommend reaching out to tax professionals you see active in the forums or feel free to us the "Build your investing team" feature above and select a tax professional. We aren't supposed to promote our firms in the forums so this would be the best way to go or speak with fellow investors.

Hi Dave,

I agree with Zachary above that it is fairly uncommon for an experienced tax professional to review only a certain portion or even an entire return someone has self-prepared. The issues is time reviewing everything, we'll need all your documents and if we see a number wrong we can't go into the tax software to see what went wrong, it would be a lot of back and forth. Most cases it would take more time to review these than actually doing it ourselves especially if we are being thorough. If you insist on having someone review it, I believe TurboTax has an ask-accountant feature but I doubt they have extensive real estate knowledge.

Yes, this can be done and people do it all the time, especially now. This is an area that could create a huge issue if not done correctly so I wouldn't advise doing it yourself as the 3115 can be a pain lol. Also, before doing so ensure you can take full advantage of a cost segregation on a STR.

You don't need to amend prior year returns to claim it. 

 When your rental produces a loss in excess of income (AGI) you have a passive loss. You are able to deduct that passive loss up to $25,000 if your income, including your husband's if filing jointly, is below $100,000. Once the income is between $100,000 - $150,000, the total $25,000 allowed quickly reduces to $0 once your income is over $150,000. At this point, you will need to look into other strategies to be allowed to reduce your W-2 income with excess rental losses. Some strategies you can look into are short-term rentals or becoming a real estate professional.

It will be difficult to be a real estate professional if you work a full-time W-2.

 Hi Sharon,

Are there specific local tax laws that will impact your state or federal taxes when you sell the property? If so it might be best to reach out to an accountant living in that specific area via speaking with local investors or a quick Google search and interview. What it sounds like you're looking for is a tax projection with some bit of planning to determine the best course of action. Most tax professionals can do this for you but you want to find the right fit. Too many will say yes we know XYZ just to bring you on as a client. Double-check reviews and ask a few general questions during the interview.

A lot of us are getting busy during this time dealing with extensions but you might be able to find someone.

Good luck!

Hi Gustavo,

Welcome!! This is a very technical question and most tax advisors might be hesitant to address it here not because they don't know but because it requires quite a bit of additional information. I personally don't work with clients in Canada but would highly recommend someone who works with clients in Canada and US. I wish I had a referral but they aren't taking clients at the moment. 

A US/Canada tax treaty might exist that will prevent "double taxation".

If you're unable to find someone here or at all let me know I can reach out to a few colleagues that might have a recommendation.