All Forum Posts by: Natalie Kolodij
Natalie Kolodij has started 63 posts and replied 3635 times.
Post: CPA Recommendation for Rental Property Buy and Hold
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My guess is that several of the REI specialized tax pros here on the forums offer proactive planning. Everyone in that top contributors list (except dave foster, he's the 1031 man) could likely provide this to you.
Keep in mind tax planning & strategy =/= tax preparation
So pricing won't be on par with the people who only talk to their tax pro once a year to drop off some documents.
Post: S Corp Salaries? Do you have to?
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Originally posted by @Kenny McCarty:
Is there a down side to keeping the properties in an LLC and then setting up an S-Corp to handle the management? I have a few STR and this is what my accountant recommended.
Basically rent the properties to the S-Corp (NNN lease) and have it handle all the STR stuff. Then I can pay myself a salary and set up/contribute to a retirement plan.
I should add that I eventually plan to expand to manage other STRs as well and hire some employees.
Thoughts?
This is possibly a good setup. Without knowing your overall needs/ structure can't say for sure.
But if a goal si fudning a retirement account and you need qualifying earned income- this can provide that. It can also be done without an S corp though.
More importantly- is your CPA treating your ST rentals as passive/non passive correctly? This is the biggest incorrect reporting item we see related to ST rentals.
Post: I’m looking for an accountant in north East Tennessee
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If you're lookign for real estate clarity- you may be better served with someone who specializes in real estate vs. someone local to you.
There are several REI tax pros on the forums here who contribute regularly- I'd reach out to a few and see if any explain more clearly for you/ fit your working style ect
Post: 1031 exchange scenario
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You've gotten some excellent feedback.
If all units are the same size 1/4 of your $600k sale, or $150k of the proceeds would allocate toward a 121 primary residene exclusion (assuming you owned and occupied it for at least 2 years) and be tax free
The other $450k would qualify for a 1031 exchange.
Dave Foster- who commented above, is 100% who you want to hire to handle it as well.
Post: How to Find a good CPA
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Also- if they're only serving 50 people, and we're using how many are repeat to gauge if people like them....
They're also not accepting new clients.
Post: How to Find a good CPA
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Originally posted by @Daniel Hyman:
Originally posted by @Grigory Pekarsky:
7. How many clients do they service per year? If they service too many (over 50), it may be hard for your business taxes to get the attention they need.
If they service under 50, I would question the level of experience and the expertise in real estate.
Or
They're an expert in it but each of those 50 clients will have a minimum billling of at least $10k
lol I'm not sure either is going to make them better/worse as a tax pro
Post: CPA for Real Estate Professional Status
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Any Tax professional listed on the right hand side of the tax forum is going to be very familular with it -all things real estate in general.
Post: S Corp Salaries? Do you have to?
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Originally posted by @Ashish Acharya:
Originally posted by @Jacob Wiltshire:
Hello,
I recently purchased a mixed use property for $390K. Gross income of about $76,800 right now.
Income: $76,800
Taxes: $9,344.68 (from which one tenant pays back $2251)
Insurance: $5,108.00 (from which one tenant pays back $864)
Mortgage: $2265.18 monthly (20 year term on $360K at 4.35%).
I plan to put away 5% each for vacancy, capex and repairs and maintenance.
Other monthly costs:
Water $200
Garbage $96
Electricity $50
Termite protection: $22
Following all of this our total estimated annual cash flow is $23,036. There are two members in the LLC including myself.
My partner has been taking about us making our LLC as S Corp. He has been told that we can do that without paying salary given we are low income.
What are your thoughts? Is this a model where if we switched to S corp we wouldn’t need to pay salary? To be it seems like we still would have to do that.
Listen to @Natalie Kolodij. Just get an LLC/Partnerhsip.
You don't want S-Corp. I know an individual who paid 657k in taxes last year because he had his property in S-corp. Completely avoidable if structured correctly with the right entity.
I think all the BP tax people should take new profile pics wearing "No rentals in S corps" T shirts lol
Post: S Corp Salaries? Do you have to?
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No self employment tax regardless of how it's structured.
The only rare rare exception is a short term rental operating more like a hotel- daily cleaning, provided room service, meals ect.
But any normal rental does not pay self employment taxes.
Having it in your name, a single member LLC, a multi member LLC- no self employment tax.
An S corp= a tax minefield for rentals. Only appropiate in very rare situations.
Post: Escaping the apartment trap
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What does your lease say?
When I was ina similar spot I had options for either a lease cancellation fee, or to be liable for rents until they re-rented my unit. (Kind of a gamble in case it took months)