All Forum Posts by: Michael Plaks

@Nick Colvill

You started by asking whether the people who qualify are flippers or landlords. REPro is irrelevant for flippers, whether they qualify or not. It is ONLY needed for landlords, and only those who have losses that they cannot fully take. Which is either because they have too much losses or too much income, or both.

@Brandon Hall must have a highly targeted clientele if more than half qualifies. My firm serves a mixture of investors, and only half of them do have rentals properties. Of those who do, over half have full-time 40-hr W2 jobs that disqualifies them right off the bat (unless the spouse qualifies).

Of those who could benefit from REPro status, less than half actually qualifies. That's still dozens of clients.

I'm not sure how you can get a good measure by asking "how many of you qualify."

@Mike Demagalski

No need to search. Read a few questions that interest you and see who answered them. If you feel the person who answered is someone you might like - contact him or her privately. And couple more for comparison.

Thanks for the mention, @Nicholas Aiola

Fine. TSFNTA. The Syndicator formerly known as The Accountant.

As married filing jointly, you have a $500k exclusion, so there's no capital gain tax for you.

However, because you rented it out, you do need to report the sale and pay tax on depreciation taken during these few months. Even if you did not take depreciation, you owe the depreciation recapture tax.

The IRS probably will not catch you if you ignore this rule and do not report anything - however by the rules, you should.

@David Mazza

As my peers already said, reinvesting income from one property into another property does not eliminate taxes on that income. Any type of property, including syndications. (One exception: you can sometimes roll the proceeds from the sale of one property into another via a so-called 1031 exchange and delay paying taxes on the sale.)

I want to highlight another point made by my colleagues, to make sure it is not lost: $15k cash flow does not mean you pay taxes on $15k. We all wish it was that simple. Your taxable income may be more than $15k (from capitalization of improvements, for example) or less than $15k (from depreciation or cash-out refi). 

That's why we accountants have the most job security after nurses and drug dealers.

@Ashish Acharya

If you believe there're no arguments on this forum, you clearly did not follow the recent, ahem, discussions about asset protection with certain highly opinionated attorneys involved. :) I was there, too. It got personal quickly.

Yeah, @Ashish Acharya ventured into those tax planning strategies I vaguely referred to.

Slightly dangerous without a thorough discussion, which is why I stopped at the door.

@Animesh Das

Let's clarify what @Basit Siddiqi said. You report this sale ONLY under specific situations - which are if you made more than $250k of profit on it or if you rented it out after moving out. Or if you received a form 1099-S, which you should not have received. 

In other cases, which is the most likely situation for you, there is no reporting.

https://www.irs.gov/publications/p523#en_US_2017_publink100011876

Most businesses get to deduct 20% of whatever is left after all deductions, including depreciation.

For the majority of landlords, it will change absolutely nothing, as they show losses after depreciation.

Interest and capital gains do not count.

For a wholesaler, here is an example.

• All assignment fees for the year are $100k.
• Marketing is $20k.
• Driving is $15k.
• Supplies, cell phone etc $3k
• Home office $2k.
• His 20% deduction is $12k (20% of what is left)
• His actual tax savings are maybe $4k.