All Forum Posts by: Natalie Kolodij

BP has a Directory 

https://www.biggerpockets.com/...

A cost seg breaks out the components of the intiial house. 

Now you can dispose of any of those separated assets that were replaced via your renovation...and you don't need a new cost seg. 

You should have costs for the assets now becuase you just paid for them. 

If your initial cost segregation separated out $4,000 for appliances 

And you just spent $10k on new appliances, you need to dispose of the old assets, and replace them with the new. 

Same for all other assetes that were replaced via your renovation.

Getting REPS doesn't free up earlier passive losses. 

They advised you to set something up they can charge you more to maintain file...that is not going to be saving you any money. It's actually creating more tax for you. 

Get a second opinion from a Real Estate Tax Strategist. 

 I also keep seeing this mindset of "everyone starts somewhere" or "how else will they learn!" ...You learn by taking education, classes, reseraching, ect- then take on the work after you're educated on how to handle it properly. But there are a lot of tax pros who view that reversed.

If I walked into a salon and they were watching a youtube video on how to do the hair color I requested while telling me they could do it and charging me...I'd be pretty upset. 

The mortgage interest on those rentals won't be deductible if you're just withdrawing cash to live on. 

It would need to be traced to a business use- like buying a new property, renovations, ect 

There wasn'ta  consensus- 

But 3 RE Tax pros said DMSH doesn't apply before an asset is in service. 

And one said it does. (and I guess your CPA too)

Thomas Castelli who's also a RE specialized CPA just  posted about this topic as well last month and also agrees, not until it's in service. 

But at a surface level: Until a rental is "in service" it doesn't get to write off expenses. Until a business is "open" it doesn't get to write off expenses. 

So how can we elect to expense vs. capitalize something before the business is operating? We can't. 

Yes. 

No accumulated prior losses on the multi family?

Don't use the literal county amounts- 

Use their ratio- applied to your actual cost 

If they say 25% land 75% building 

And you paid $500,000

Your value will be $125,000 land, $375k building 

That's pretty odd, also no captial accounts. Box 3 would be other rentals...like if you were renting cars on turo, or renting equiptment. 

Box 2 is for rentals. 

I'd find something after tax season who's real estate specialized and pay them to review the partnership.