All Forum Posts by: Natalie Kolodij

That is what that means- if it's in a super demanding area there is a ton of value in the land vs building value. 

Some condos own some land, some don't. 

If your tax assessor allcoates you a land value though you technically do - 

You can also check your appraisal and see if it offers more information on values 

If you visit the Network --> Build your team --> Professional services you can find Tax Professionals. (at the top of the website)

You can also check out the tax forums and see if any one who is active on the website would be a good fit- most REI tax pros work with clients virtually. 

Some properties do have income still on paper. 

A good tax pro will look at the various options you're allowed to use to set up initial depreciation- one may be more beneficl than the other. 

Also, cost segregation

Quote from @Jon Fletcher:

@Corrine Bordua awesome post! Do you have any more info on the Augusta Rule? I'm guessing there are limitations to how much rent you can charge to your business? 

It has to be for an actual business use (like you're actually hosting employees for an event, or something business necessary) and you can deduct fair market value for the space. 

Also worth noting it still has to be ordinary and necessary. 

There's beena  huge uptick of youtube and tiktok people saying to do this basically just if you work from home to charge yourself and take advantage of this- and there's more to it than that. 

You gain will be sale price- closing costs- OG Basis - Depreciation. 

The lower FMV basis used for depreciation is only for that. The determined depreciation Adjusts that basis but the gain is based on actual purchase price + adjustments

Quote from @Han T.:

Originally posted by @Natalie Kolodij:

Quote from @Han T.:

Hi BP Gurus, just latching on to this topic, assuming an aggressive CPA, where does this miles deduction goes to on the tax form? I would assume since it is for a rental business, it would go under Schedule E, however, Schedule E expenses are pegged to properties...how do one expense such deduction that are not specifically related to a property? 

If it's related to rentalals it should have a scheduel E to connect to. 

If it's costs for D4D that are going into finding your next property I'd likely add them onto the basis/purchase price of that next property. 

Hey @Natalie Kolodij, I see what you mean. Very well explained! 

Just a further clarification, would it matter if my D4D was in one or a few state, in say, TX, but then eventually, I ended up buying a property in another, say OH. It was a legitimate D4D (added into the basis of the next pty in OH). Would that be a major red flag?  

Typically each market is somewhat looked at as it's own individual "business" for tax purposes but it would depend on the specific situation

If you're holding in a partnership I recommend QBO since you need a balance sheet too. 

If not I like stessa

Keep in mind the renovations/ preliminary costs before it's in service will be capitalized into the basis of the property mostly vs. expensed so it may be easier to just track those on a spreadsheet and start using stessa once it's "live"

Welcome to Bp! 

So important to note that if you have a very sucessful business your AGI may be too high to have direct tax benefit from REI.

The passive Income Small tax payer exclusion allow people making under $100k annually to deduct up to $25k of rental losses against their w2/ self employment/ other incomes. 

That begsin to phase out and at $150k or above your passive rental losses aren't deductible. They don't disappear. Any passive income wil be reduced by passive losses- and any losses left will carry forward to the next year until there's a usable situatoin. 

But that being said I'd recommend reaching out to @Jake Hottenrott for a good Virtual REI specailized CPA