All Forum Posts by: Ivan M.

Thank you both for responding. Unfortunately, I do not have an accountant as I have self prepared  most of my returns in the past. Something tells me though...this year I will find an accountant. However, back to the question. As I was traveling when i wrote the question....the depreciation taken each year was only 4582 for say 4.8 years and not 6400. An actual accountant did help me come up with the 4582 figure when I first put the home out to rent looking back at the paperwork now. I'm in South Carolina and I'm fairly certain my capital gains take rate would be 15% federal (not sure if I should factor in state capital gains in this scenario?) and I also believe my tax bracket should be in the 15% range too. Does this information help anybody get me a little closer to an answer to my question?  Again, the reason I'm asking is that calculators were coming up with 4k to 12k...so I'm a little confused. Carl, I'd love to only be 1800 if possible. 

Hi all, 

I see a few different calculators out there but each one gives different results. Perhaps someone help or point me in the correct direction. I'll be selling my only rental soon and wanted to determine the capital gains owed if I don't do a 1031 exchange. The stats are: house purchased almost 11 years ago (yes, top of market..) for 176,000 and we lived it the home for about 6 years and have rented it out for the past 4.8 years. Say I get 188,000 sales price today and I took depreciation of around 6400 for the past 4.8 years. No major improvements or additions except carpet, water heater, and a toilet. What might i possibly owe in taxes? Calculators are giving me different amounts. 

Going to go the safe route....no depreciation and no right offs on repairs, etc. Thanks all very much for the feedback.

So I have gotten two differing opinions from two CPAs. One says sure, the IRS will strictly follow the money. If they see that I'm making the mortgage payments, insurance, taxes, and claiming rent, etc. then i should depreciate the rental and right off the appropriate expenses. Another CPA says, I can't do that because one of the people on the title / mortgage is actually living in the house so technically it's not a rental. Both said i could definitely include the 1098 form on my taxes.... anyone else care to chime in? Another way to look at it is: does the property tax savings and better mortgage rate outweigh depreciation and repair right offs, etc.....Am i wanting my cake and to eat it too?

I think you've got it correct. We both sign everything together but I pay for everything. I honestly don't know yet if the state would have a problem with homestead exemption at the same time I'm taking depreciation on my taxes. Perhaps i simply can wait for someone to pick on the phone with sc dor and someone will know. I'm not trying to pull anything over honestly. Thanks for your reply. If anyone else has any thoughts I'm all ears. Thanks.

Besides the point of not doing business with family...I'm purchasing a house for my mom who will pay me rent. To get a better interest rate and rate on property taxes she has offered to be on the mortgage and deed. Again, I will pay everything myself (small mortgage, insurance and taxes) and technically don't need a co signer but it seems silly not to take at least consider this option. My question is can I take all the depreciation on MY taxes being a co signer (non occupying)? Again, I will be paying everything anyway. Besides this question, I'm open to any other thoughts (besides the issue of don't do business with family). FYI. Shes getting older and is simply tired of being a homeowner. She has more money in the bank than I do. She wants to be able to call someone should repairs etc. be needed. Thanks!

Besides the point of not doing business with family...I'm purchasing a house for my mom who will pay me rent. To get a better interest rate and rate on property taxes she has offered to be on the mortgage and deed. Again, I will pay everything myself (small mortgage, insurance and taxes) and technically don't need a co signer but it seems silly not to take at least consider this option. My question is can I take all the depreciation on MY taxes being a co signer (non occupying)? Again, I will be paying everything anyway. Besides this question, I'm open to any other thoughts (besides the issue of don't do business with family). FYI. Shes getting older and is simply tired of being a homeowner. She has more money in the bank than I do. She wants to be able to call someone should repairs etc. be needed. Thanks!

Thanks all. I believe she'll try the non team route as immediate income is not the goal at the moment. And as for personal investments and getting a "discount" from a future broker....looks like a lot of firms around here work with Caps and once you hit your Cap...then you get to keep either 95 or 100% of your commission (minus taxes of course)....so any personal investments we do simply speed up reaching your cap faster and I suppose that's worth something....Thanks! 

Thanks very much Ryan. You mentioned something I forgot to speak to...the "team" type firms vs. the firms who arent big on firms. The "team" friendly firm does just what you said...they will help teach her the ropes but will take a chunk of her commission on top of what the broker gets. She does have to learn the ropes though. There is another firm that says they are not big on "teams"...but do a 6 week training program and will assign a "mentor" to her and this mentor gets a flat fee for say the first 3 or 4 transactions my wife completes. Not sure which one is the best but yes, seems like whatever you do...get the training and get out from under those that take a chunk of your efforts. 

Hi all, 

So my wife has been a stay at home mom for the past 7 years. She's about to take the test to be a real estate agent in South Carolina. I have a good and steady day job (plus side gigs) along with one rental (past 5 years). We're interested in expanding to perhaps up to 4 or 5 rentals and perhaps do a flip here and there. We're pretty conservative people, and I'll get into more specific questions down the road about how we might achieve those goals.....but our immediate question(s) is: what to look for in an investor friendly broker to hang her license with? She'll be doing the standard buy and sell for clients (another question: is the split between broker and agent negotiable?) Doesn't seem so at one firm thus far....Third question: has anyone negotiated a different split with their broker for personal investments? So what say you fine folks. General tips about the above and of course anything else you'd like to share in general about getting started both in the standard buy and sell agent role and the investor role. She plans to read the blog post about Working with Investors as a Realtor along with Keller's Millionaire Real Estate Agent book. Thanks!