All Forum Posts by: Michael Plaks

@George Moehlenhoff

It's cheap if he does it well

@Chirag Shah

As @Daniel Hyman said, most (if not all) of us real estate accountants on this forum work with clients remotely and nationwide. So, it does not really matter, especially when you have businesses in multiple states. And neither FL nor TX have state income tax, as you know.

@Jacob Rivera

S-corporation is usually a bad choice for holding rental properties, tax-wise.

Why did you decide to use an S-corp?

 Entirely your own fault! :)

@Joe Lambert

Legally - no. As @Steven Hamilton II pointed out, you will be treated as if you did take depreciation even if you did not.

What happens if you did not take depreciation for a few years as an innocent mistake? You can then catch up with all missed depreciation once you discovered the mistake, all in one year. Which sounds like a loophole fitting your objective, doesn't it? The problem is that you're not allowed to do it intentionally.

Also, I disagree with your attempts to plan for "after-Trump" taxation. The current rules can very well stay past his term(s), so it's a rather risky planning. Besides, who can predict the world and domestic economy a few years from now? What about your personal financial situation? 

I'm all for "let's tax advantage of today's laws" planning. Not so much for "let's wait based on expected future tax laws."

@Carl Graff

The CPAs you're referring to did not necessarily contradict each other. The answer could be yes or no, depending on the context. It's possible that they were talking about a different set of circumstances. 

Of course, it's also possible some of them were wrong - happens in every profession, including ours. And this is why I advocated using experts from our BiggerPockets community. Our strength is that we specialize in real estate, and the $25k rule (actually, an exception to a general rule) is one of the niche rules. General CPAs may not be aware of them.

@Daniel Dietz

I was not talking about a Roth conversion - it was @Carl Fischer who mentioned it.

Both distributions and Roth conversions are taxable the same way. Normally, there's a 10% penalty issue that separates the two, however not in this case, since Carl Graff is in the retirement zone already. There could be reasons to convert rather than distribute, but it's a matter of an overall financial planning.

You're correct that my point was - yes, it might make good sense to use up the entire $65k in one strike. No point to save it for future capital gains, because Carl is likely in the $0 capital gain bracket. However, $65k is not possible in one year, making tax planning essential.

Once again - tax planning needs to be discussed one on one, in more detail.

@Carl Graff

The answer is simple: yes you can, and probably even should.

Reason: when your income is that low, your carryforward losses will likely end up partially wasted each year until depleted completely, with no real benefit to you.

But, like any tax advice, this is generic, and it can be wrong for various specific circumstances.

And I have a suggestion. Why use a tax advisor who agrees with the tax experts on this forum? Why just not use one of us?

@Kyle Lauriano

For an accountant, you can reach out to @Account Closed. That said, you can also work with accountants who are not local. There're a bunch of us here on the forum. 

Attorney, on the other hand, is best to find locally.

Yes, @Jack B., you will start the full 27.5 depreciation of the roof whenever it is placed in rental service. The house, since it had been previously depreciated, needs to be picked up where it was left - which is a little tricky.