All Forum Posts by: Navid A.

@Weng L.

I spent over 8 hours today calling new lenders to find a solution to the same problem. My typical portfolio lenders on the secondary market have halted operations or they have changed their terms significantly. Their new terms are almost laughable, they might as well just stay closed. Who would be willing to do a 55% LTV cash out at rates above 7% with a 2% origination? Get out of here...

Made the decision on my end to pivot our strategy all together. The deals are coming gents,now is the time to stay liquid. For this reason, I'm doing flips now rather than rentals. Just my 2 cents

@Rich Lennon

Yes, there is a hold on evictions, but there's also a hold on foreclosures. Not to mention the fact that you have the option of taking at least a 3-6 month forbearance option, which most banks are allowing you to make an adjustment for to add onto the back of the loan product. Is this whole thing less than ideal? Absolutely it is, but it's just like you said...we're all in this together.

Out of curiosity, how do you claim your home office deduction? I haven't seen a way to directly deduct a home office on a schedule E. 

BP,

Lots of ambiguous info out there regarding these tax matters (to be expected). If I have 6 rental properties, all under a single-member LLC, is it worth exploring the option of listing income on schedule C and treating it like the intended business it's supposed to be, rather than on Schedule E? I feel like I'd be able to have significantly higher deductions if income were listed under Schedule C for my business rather than on Schedule E, passive income. As I'm transitioning out of the Army, I've spent most of my time pursuing my RE activities that technically qualifies me as a "RE Professional" based on the IRS requirements. Is it worth paying the additional Self-Employment Taxes (keep in mind that my deductions will be higher under schedule C, hence will be showing less taxable income).

I ask this because I have several Business expenses that are not directly tied to any one property or tools/assets that are used for numerous properties (i.e. table saw, Utility Trailer, Simplisafe Unit, etc). This also includes my LLC origination fee, tax prep fees, meal expenses, etc.

To my understanding, the following are NOT deductible under Schedule E income (please correct me if I'm wrong):

• Business Meals
• Home Office Deduction (% of mortgage, utilities, etc)
• Miles driven looking for new properties or meeting agents/clients
• Cell phone expenses
• Travel expenses to/from business trips
• Bank fees

Can someone chime in on this topic?

BP, 

Lots of ambiguous info out there regarding these tax matters (to be expected). If I have 6 rental properties, all under a single-member LLC, is it worth exploring the option of listing income on schedule C and treating it like the intended business it's supposed to be, rather than on Schedule E? I feel like I'd be able to have significantly higher deductions if income were listed under Schedule C for my business rather than on Schedule E, passive income. As I'm transitioning out of the Army, I've spent most of my time pursuing my RE activities that technically qualifies me as a "RE Professional" based on the IRS requirements. Is it worth paying the additional Self-Employment Taxes (keep in mind that my deductions will be higher under schedule C, hence will be showing less taxable income).

I ask this because I have several Business expenses that are not directly tied to any one property or tools/assets that are used for numerous properties (i.e. table saw, Utility Trailer, Simplisafe Unit, etc). This also includes my LLC origination fee, tax prep fees, meal expenses, etc.

To my understanding, the following are NOT deductible under Schedule E income (please correct me if I'm wrong):

• Business Meals
• Home Office Deduction (% of mortgage, utilities, etc)
• Miles driven looking for new properties or meeting agents/clients
• Cell phone expenses
• Travel expenses to/from business trips
• Bank fees

Can someone chime in on this topic? 

This once again confirms the fact that not all CPAs are made from the same cloth...I think I need to find a better tax "expert" as this is the 2nd time I was given the wrong information. Perhaps my current CPA doesn't specialize in RE, but something like the mileage deduction would apply across multiple industries. I was advised to deduct mileage from the total gross income of the LLC, but failed to mention the reimbursement part.

@Eamonn McElroy

So if we amend the operating agreement to reflect that auto expenses will not be reimbursed, we could then claim UPE on our personal return?

@Michael Plaks, that makes sense, thanks for clarifying. I'll continue to log my miles and deduct them from my personal tax return then. The LLC will not be reimbursing for mileage related expenses.

@Kory Reynolds, just to confirm/clarify...The business miles driven under the operational scope of the LLC are not deductible from the LLC's annual gross income? How can I or should I claim the mileage deduction on my portion of the K-1 rather than my personal tax return? ...I guess it wouldn't really matter either way because it's still being deducted from my total income.

The reason I ask is because my partner wants to know if he would get the benefit of the miles I drive daily to manage the properties and ongoing projects. The thought is that those are business miles and the deduction should be deducted from the gross annual income before being split 50/50. I assume this isn't possible? 

Hey BP,

How do mileage deductions work in a partnership structured as a multi-member LLC? Are the miles I drive only deductible to my share of the rental income or is it deducted from the total income of the LLC first?

My partner in this new LLC is the "money guy" and I'm running the operations for a 50/50 split. I hope I explained my question clearly. For example:

Total Gross Annual Income: $20,000

Partner 1: drove 500 miles (2000 x .575 = $1,150 deduction) and earned $10,000 (50%)

Partner 2: Drove 0 miles and earned $10.000 (50%)

Would Partner 2 be able to deduct the business' miles driven or do those miles only get deducted from Partner 1's income?

Thanks!