All Forum Posts by: Kelly O'Keefe
Kelly O'Keefe has started 0 posts and replied 123 times.
Post: What other kind of income can I deduct with Rental Real Estate losses?
- Accountant
- North Carolina
- Posts 123
- Votes 163
Quote from @Michael Plaks:
When discussing taxes, we need to use correct terminology, otherwise we risk misunderstanding.
There's only one kind of rental losses for tax purposes: net loss from operating a rental property. It is rent income minus all allowable deductions minus depreciation. You may think of it as paper loss, but this term is not helpful for taxes.
Such a loss is considered "passive" and can always offset passive income, and passive income only.
As you discovered, you cannot apply this passive loss against your NONpassive income unless your income is relatively low or you qualify for one of the exceptions.
So your options are:
A. Wait until some future event unlocks these losses, most commonly when one of your passive investments is sold or when your passive investments produce positive income even after all the deductions.
B. Try to qualify for one of the exceptions: Real Estate Professional or Short-term rentals. This may or may not be possible, depending on your situation.
C. Intentionally chase passive income, such as investing in a business that you do not operate - directly or through syndications.
D. Sell a property or another passive investment.
While options B,C,D may allow you to "cash" your losses, you could be shooting yourself in the foot. I've seen many investors getting themselves into lousy or risky businesses/investments while narrowly focusing on taxes.
Find the most profitable and least risky ways to deploy your money. If they happen to be tax advantageous - great. But don't lose the business perspective while chasing tax benefits.
Can't beat this answer
Post: Looking for Good CPA that is real estate savy
- Accountant
- North Carolina
- Posts 123
- Votes 163
Congrats on getting your first house. There are quite a few on the forum who can help. Is there any specific strategies you are interested in using?
Post: Looking for a CPA for tax filing and tax strategies throughout the year
- Accountant
- North Carolina
- Posts 123
- Votes 163
Are you looking to work with a tax pro remotely or in person? There are a few pros from this forum in the area who could probably help.
Post: CPA Recommendations in Nebraska
- Accountant
- North Carolina
- Posts 123
- Votes 163
Welcome to the forum, most the tax pros on this site work remotely and specialize in real estate investment. If you are willing to work remotely there are several tax pros here. Off the top of my head I don't know of anyone in Lincoln but I believe BiggerPockets is getting ready to launch a search function by area.
Post: DIY Cost segregation options for a 12 unit apartment
- Accountant
- North Carolina
- Posts 123
- Votes 163
Hi @Prasad J.
Depending on the benefits I might consider hiring a firm and paying the fee. That 5k sounds like a large amount, but you have the potential to save way more in a single year. I would prefer to have a cost set signed off on by a engineer that I know will stand up to an audit vs a DIY option
Post: First Tax season House Hack
- Accountant
- North Carolina
- Posts 123
- Votes 163
I think one of the biggest differences between H&R Block and someone from this forum is their ability to help you with tax planning as well as filing. If you haven't been tracking your material participation, done a cost segregation, or any other techniques specific to real estate and just want someone to file on your behalf then there might not be a huge difference between H&R and a specialized CPA. That being said a real estate specific tax pro could answer all of your questions. I would recommend keeping the appointment you have and then if you don't feel confident after speaking with them reach out to someone specialized in real estate.
I would recommend starting on tax planning for 2024, then when it comes time to file next year you are already set up.
Post: Another guy just starting out
- Accountant
- North Carolina
- Posts 123
- Votes 163
@James Heiberg
Welcome to the site, there is a ton of resources on the site for people in Colorado. They also have a couple meet ups in Denver you could try.
Post: Looking for Real Estate Tax Accountant Referrals in Upstate SC
- Accountant
- North Carolina
- Posts 123
- Votes 163
I think most investors starting out feel the same way as you and feel more comfortable being able to sit down with their CPA in person, but I think it can be done remotely and still be as effective. Especially when it comes to more complex or niche topics I would prefer to have a specialist I can meet with online vs a generalist I can meet in their office.
When I say there is 20+ Pros on the forum I mean there are at least 20 different tax professionals and/or companies that specialize in real estate on this forum who would be able to help you. Digb is one, but there are others as well. I am sure by the end of the day there will be a few others who will have commented on your post.
If you have specific question about your portfolio you are always free to ask them here. This is a great way to see which tax pros have the background to support you.
Post: Looking for Real Estate Tax Accountant Referrals in Upstate SC
- Accountant
- North Carolina
- Posts 123
- Votes 163
Congrats on the property and receiving the permits! Is there a reason you are set on having a local CPA? most of the tax pros on this forum work remotely and specialize in real estate investment. If you are interested in working remotely there are 20+ pros here would would be more than capable of helping you. I would recommend messaging a couple and seeing who fits your needs.
Post: CPA Recommendation NH
- Accountant
- North Carolina
- Posts 123
- Votes 163
Are you committed to meeting in person or are you willing to meet remotely? If you are willing to meet remotely there are 20+ professionals on this site who can help.
As a fulltime W-2 earner it may be hard to claim REPS status, but material participation, cost segregation, and other strategies could benefit you. I think it is worth setting up a meeting with a few companies specializing in real estate and seeing if there potential for savings.