All Forum Posts by: Nicholas Aiola

@Elena Gasol You bet! The type of loan won't change the deductibility/amount of the interest or depreciation expense deductions - it will be the same either way.

@Pat L. IRC Sec. 1038 and Reg. Sec. 1.1038-1 are where you will find the answer to this one.

@Brendan August You can do a cost seg in any year, but bonus depreciation is only available in Year 1.

Reach out to @Yonah Weiss for cost seg info/pricing.

@Paul Jiang You may be able to. It depends on your gross rental income from each investment. Take a look at Reg. Sec. 1.469-9(f) for more details.

@George Cummings If the property is not owned by the company, it should not have been on the company's tax returns. The taxpayer who owns the relinquished properties must be the same taxpayer who takes ownership to the replacement properties.

@Nina Ning To determine whether or not the cost seg would be beneficial for you would require analysis. If beneficial, I would not recommend DIYing it. 

@Karl B. 100% of your contribution to the DAF will be reportable on Schedule A (Itemized Deductions) in 2021. How much of that will actually reduce your taxable income will depend on your total itemized deductions compared to your standard deduction.

@Evan McCourt This is more of a legal/asset protection question than a tax question. Personally, I believe it is best practice to have separate entities for rentals and flips considering they are two different businesses entirely, and the income is classified differently for tax purposes.

Some investors like to have a separate LLC for each rental property, others group multiple rentals under one LLC. It depends on the value of the properties, your equity in them, and your risk tolerance. Your attorney can help you nail down the specifics on this.

@George Habator You are managing properties for others, meaning you are collecting income and paying expenses as an agent for the owner. Therefore, the $22k in your example is not your income to report, and the $1k repair is not your expense to report. Your Schedule C would show $1k management fee income and no expenses (using your example).

You would provide the owner with a year-end owner statement (P&L) showing the rental income and expenses you collected/paid on their behalf. You will also be responsible for sending a 1099-MISC to the owner to report gross rental income collected, as well as 1099-NEC forms to all eligible contractors that you paid on behalf of the owner.

@Account Closed Check out the Form 2553 instructions, specifically the section titled "When To Make the Election". That said, there is the opportunity to request relief for a late election under Rev. Proc. 2013-30.