All Forum Posts by: Natalie Kolodij

@Yonah Weiss is able to do cost segregations for clients all over the united states and does a great job. I'd start with reaching out to him. 

It sounds like you will likely qualify for real estate profesional status which means a cost seg could benefit you. As mentioned form 3115 will need to be filed to adjust the acocunting method with the IRS. This form is fairly substantial and will add cost to the return, as will the cost of having the cost seg done. 

Make sure to run down the potential write-off/savings benefits against the costs and see if it makes sense. 

An LLC does not offer any tax benefits, it's just a legal protection tool.

There are several things to be lookd at when figuring out if a cost segregation will save you money: 

- Is your AGI under $100k? If not you may not be able to deduct losses generated as @Yonah Weiss mentioned. 

-Are you a real estate professional? If so there may be a tremendous benefit. 

-Is there a chance you'll become a qualifying real estate professional in the future? If so you may not want to generate a large loss now, as losses created BEFORE you are a RE pro do not become deductible once you qualify. Whereas if you create a large loss after qualifying, they do. 

-Is your Tax bracket higher this year than it will be going forward? Does it make more sense savings wise to have a loss in a later year instead and not necessarily do the cost segregation this year?

Correct- I'd definitely reach out to @Steven Hamilton II 

Not a form every tax pro deals with regularly but I know Steven does 

If I'm understanding you set up a C corp property management business, but it only "manages' your rental?

Your property is long term rental- so passive by nature. So you want REP status to use losses. 

Your time spent managing that rental is likely no where near enough for REP status- on a single property....not likely. Recently in speaking with an expert who was the IRS consulting expert on passive loss issues for 20+ years he said that his stance would even be that renovation time/hours didn't qualify at all because they're not "business operating" qualifying hours- the business isn't open yet if the renovations are happening before the rental is in service. 

Is it charging your management company fair market for services? Is the property managemetn company reporting taxable income on that amount? 

@Michael plak mentioned some issues regarding the C corp issue as a whole 

But your CPA's issue may also tie in to your qualifying activity "being a  property management business" Not really having a profit motive, meeting the definition of a business per 162. It's only purpose is trying to create a work around to qualify for REPS.

@Michael Plaksundefined

With bonus you get all of it. 

$100k in bonus for the year and property in service Dec 30 = $100k write off. 

Agree with Yonah on 39 year on STR

Also it may qualify as non passive, not sure if you claim RE pro. But that can come into play both ways 

@Steven Hamilton II is Real Estate Specialized. He works with clients all over but he has a Florida office specifically. 

Hi Laurie, 

I can understand your frustration- this year was frustrating across the board.

 I'm not personally doing any of that work (Website updates, class setup , ect) - I have calls blocked out for the next few weeks and I outsourced all of those updates to put changes in place for next year- so that it will be better

I appreciate the advice and that's exactly what I'm trying to do. 

Hi Doug, 

I sent over an email to setup a phone call bceause I can't discuss specifics publicly but I'll address what I can - 

I left for my trip on October 15th - it wasn't a trip booked mid tax-season that caused delays. 

I'm not a CPA- I've never said I was. I have the five year education requirements, experience requirements ect, but the EA license made more sense. I don't only have a a PTIN- I'm an IRS Enrolled Agent which is a tax specific exam and credential that allows you to be federally licensed, vs by a specific state. The only thing a CPA license allows you to do that an EA doesn't is Audit financial statements for publicly traded companies. Several of the amazing tax pros here on BP are all EA's not CPAs (Steven Hamilton, Michael Plaks)

State filing requirements vary and are based on an income threshhold for the state- if you have 0 or negative income then there may not be a filing requirement. 

On the service level side - people are far more likely to share a bad expereince than a good. 

At the end of the day I'm a small business owner, and the past couple years in tax have been absolutely insanity. We've had more tax changes, law updates, filing delays, IRS 8 months beind on opening mail and answering 9% of calls received, PPP loans, Stimulus checks, ect- We've had more tax bills released in the last 2 years that required us to learn them on the fly DURING tax season (Becuase they were changes applying to the literal returns we were preparing) than we'd had in the past 10 years combined. It hasn't been a normal tax enviroment- and the smallest firms got hit the hardest.

That was combined with a ton of preparers retiring from tax, and very few entering. So there has also been a huge staffing shortage in the field as well. 

So in short- I'm not a scam. I'm just a small business owner who got her *** handed to her the past year. I thought I'd scaled back enough to handle everything but with continued changes it was a moving target. 

I will absolutely admit the service was sub-par, and I can tell you right now I've already made a ton of changes to never go through that again. No one goes into business with a plan to provide less than amazing service, but it can happen and all you can do is try to correct it moving forwad.

Mistakes will happen- we're still humans. I've found major mistakes made by other big name Tax pros on BP, and I'm sure I've made them. Everyone makes mistakes sometimes. 

If there were mistakse found I'm so sorry it happened and I'll do what I can to make it right in whatever way makes sense. 

Also here to recommned @Steven Hamilton

@Steven Hamilton II 

And will note- that if you mess up basis and a few small things...it always costs more to have something fixed than it does to have it done right the first time.