All Forum Posts by: Paul Allen

I was unable to find a Tax Court case pertaining to your situation. However, I think claiming the money was borrowed for the rental property 6 months after you closed on the rental property, but shortly before building a pool at your residence is more than I would try to convince the IRS. I'm gonna follow this thread, though, as I am interested in other opinions on the matter.

Best of Luck with Your Real Estate Investing!

@Christian Nachtrieb if your bookkeeping goal is to stay out of tax trouble, then the answer is yes, a spreadsheet is fine. You can also do that with your photography business - just track income and expenses on a spreadsheet. 

People often want to analyze their business numbers to gain insights on how to improve or expand their business. That's what accounting software (and accountants) are for. Wave (or QBO or Xero, etc.) can assist with that for the DIY crowd. It's largely a matter of taste.

Best of Luck with Your Investing!

A rental property can be 'placed in service' without actually being rented. In order to be placed in service the property must be ready and available to rent. Landlords will often use the date they first advertised the property to prospective tenants as the date placed in service. 

So...if your property was ready and available for tenants in 2017, then it was placed in service in 2017, and you can deduct expenses in 2017.

Welcome to BP.

Best of Luck with Your Real Estate Investing!

On a side note: renting to a relative for less than fair market value (FMV) is defined by the IRS as personal use of the property and not renting at all. This would get all your rental property expense deductions disallowed, which would stink.

You're probably close enough between what you're charging and FMV to not draw attention to yourself, but I wouldn't advertise you're charging your m-i-l less than FMV.

Best of Luck with Your Real Estate Investments!

My office is in 23452 if you want a face-to-face consult. 

Best of Luck with Your Real Estate Investments!

If there was one right answer to this question there'd be an app for it.  There are a ton of variables, most of them specific to you and your wife. What are your goals, and what is your comfort level with investing in various asset classes? How much can you invest before you start losing sleep?

If you just want to work through that question, find someone with an hourly rate. Don't pay for comprehensive planning services if you aren't using them. And like @Bill Hampton said, make sure they are a fee-only fiduciary.

Best of Luck with Your Real Estate Investing!

Yeah, I know, 2018 just started. That wasn't a typo.  I like to state my resolutions as if I am looking back on a year, not looking forward into it. Makes it feel less like a dream, more achievable. These things are getting done!

2018 was a great year because I 

1. Continued to grow my business
2. Started note investing
3. Got a lot of great education and met many great people at my local REIAs (Tidewater Real Estate Investors Group and Hampton Roads Landlord Association)
4. Saved my clients hundreds of thousands of dollars in taxes
5. Helped some families achieve their financial goals
6. Got my behind to the gym 4 days per week
7. Read 12 books I haven't read before (I'm a slow reader!)

Why was your 2018 great?

I seem to be getting quite a few offers recently from banks offering me credit cards with initial cash back bonuses.  Spend $4,500 in the first 90 days and get a $500 cashback bonus.  Spend $500 in the first 90 days and get a $200 cashback bonus.

No annual fees, no additional charges that I can see.

Are others getting these offers? Are you taking advantage of them? What is stimulating the banks to start making these offers? (Or did they just suddenly find me for some reason?)

If integration with your financial institutions is the issue, I am not sure how to help. I don't know of an app that integrates with more financial institutions than Mint.

I find mistakes on 100% of the self-prepared tax returns involving rental property that I review.  I have not yet reviewed one that did not have at least one error. Sometimes they are minor. Then there's the guy who got an additional $10,000 back from the IRS after we amended. 

Now - people are usually bringing me their returns to review because they aren't feeling too confident about them. Or they've received some IRS correspondence indicating there is a problem. I suspect a random sampling of self-prepared returns would turn up some that were correctly prepared. 

Are you getting value from your current guy? Only you can say. You can get value somewhere, though. Plumbers are expensive, too, but I'm not crawling under my sink anymore.  

Best of Luck With Your 5-plex!