All Forum Posts by: Natalie Kolodij
Natalie Kolodij has started 63 posts and replied 3635 times.
Post: Self employed, meet IRS def of real estate professional too. How to take losses?
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"As they are new and in the works" - Were they ready and available for rent during the year?
You'll need to make a grouping election to treat all of your rentals as one activity so you can count the hours on all of them.
Then the rest is dependent on software. In the tax software your tax pro can mark those properties as "real estate professional" which does indeed make them non passive.
Then any net loss will flow through to Schedule 1.
That is where it nets. It won't specifcally reduce your Self Employment income for the purpose of caluclating SE Tax if that is what you're asking.
Post: Roof Replacement Depreciation
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You can only depreicate what you actually paid.
Post: Capital Gains Exceeds $500k - primary residence
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This thread is a lot of wrong information. Ignore everyone except michael.
You're making a ton of money on the sale. Invest some into paid consults with a few real estate tax experts.
Post: Looking for an RE CPA in Washington State!
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Traner Smith in Edmonds has a partner who is real estate specialized.
Also Mark Canton in Seattle is super popular with local investors.
Post: High taxes with 1099 income
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Buy and self manage a short-term rental.
Spend some of your money on a better tax strategist. That fee is a write-off. win win.
Post: Schedule E and Multiple Properties
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Quote from @Michael Federighi:
I disagree and think that you can combine all the properties into one schedule E. Of coarse things like Basis and Depreciation will have to be maintained for each property. The IRS allows grouping for determining passive vs. non passive losses as well. The end result would be the same as far as net taxable income.
The grouping electing is stand alone of the requirement to report each rental as a separate schedule E.
You disagree based on what IRC guidance?
Post: Recent Tax Court Case on Failed Real Estate Professional...Again!
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I loved this case and made a few videos on it
Because it was literally like a list of everything we warn you about what not to do..all done by one taxpayer.
I also like the part where he argued he worked 12 hour days every day he was at his lake house..but oh ya...of course occasional BBQ time and taking kids on the boat tubing. But that time was hardly any lol...okay sir.
Post: Tax Prep Handling on Partnership Properties
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Quote from @Basit Siddiqi:
Quote from @Marc Howard:
@Victor Alfonso congrats on those SFR properties in Metro Atlanta! Tax prep for partnership properties can be a bit tricky.
For the first scenario, you could report the income, expenses, and depreciation on your tax return, then issue a Schedule K-1 to your partner for their 50% share. That way, you're both reporting your fair share.
For the second scenario with the revocable land trust, treating it as a disregarded entity seems like a reasonable approach. You can report the property's income and expenses directly on your tax return, then issue a Schedule K-1 to your partner for their 50% share, just like in the first scenario.
Even though I'm offering you some advice here, your CPA's suggestion to consult a real estate tax attorney is a good one. Tax laws can be complicated, and you don't wanna mess around with them.
I hope this helps, and best of luck with your tax prep!
An individual does not provide a K-1 to a partner after preparing their individual return.
Also bad advise for a CPA to suggest for the original poster to speak with a tax attorney.
Most tax attorney's deal with big ticket tax items(interpreting new tax laws, requesting private letter rulings, defending clients infront of the IRS tax courts, etc). The CPA should know how to prepare the tax returns / forms based on the information provided.
Agree 100%
Find a real estate specialized tax professional- your CPA should know how to handle real etate filings, or they're not the CPA for you.
And Marc was also incorrect in his guidance- There is no K-1 issued when reporting as a JV, a K-1 is issued by a 1065 partnership. No 1065, no k-1.
Post: Capital Gains on personal residence if spouse dies before home is sold
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1. your client should consult a tax professional for advice specific to their situation
2. When a spouse passes the remaining spouse has 2 years to file and receive the full $500k exemption sitll
Post: Question regarding long term capital gains and depreciation
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Quote from @Andrew Syrios:
Quote from @Natalie Kolodij:
Quote from @Andrew Syrios:
We are thinking of selling a couple houses we've owned for a few years and they will have fairly significant gains. We have a fairly large portfolio of other properties too though. Does the depreciation loss for those properties count against long term capital gains or does it only count against ordinary income/short term gains?
Thank you in advance!
If you have other rentals with prior suspended losses, or losses in the year of sale those can offset the gain on the sale.
There's more complexity to the ordering and such- but that's the meat and potatoes of the meal.
Thank you Natalie! I thought about just tagging you in this post and probably should have. I presume that suspended losses include depreciation losses, correct? Thanks again
Losses are losses - created by depreciation or other expenses. ALl the same bucket.