All Forum Posts by: Rich McCormack

Interested. I'm in Yorktown Heights.

I am interested in joining! 

I do the same thing you are doing. I keep a zipped up folder on my desktop. I also have a Dropbox link with all the docs and a google drive folder. I ask the lender which format they prefer. Not sure what else we can really do to make it any easier.

@Brandon Hall 

Thank you for the info!! Much appreciated! 

If I did not have an appraisal done when I converted to a rental how can I justify the fair market value of the property at the time of conversion.  

I did sell it below what I believe to be my adjusted basis. I am going to be as accurate as possible, but the fmv is just my opinion without any real evidence. Would you suggest I just look at comps that sold at the time I converted in 2011?

Do my chances of getting audited rise with a situation like this? 

Hi BP,

I bought a townhouse as my primary residence in 2006. Moved out in 2011 and converted it to a rental unit which I recently sold in 2015. My question is about how to treat the loss for tax purposes. I have a CPA that will be doing my taxes, but I just want to get a better understanding because I read so many different opinions on the topic.

My understanding is that the rental property is considered a Section 1231 noncapital asset. The loss is classified as an ordinary loss and is 100% deductible against my earned income.  

I also understand that my basis is now the lower of my adjusted basis at the date of conversion or the fair market value at conversion. In my case the fmv at conversion was lower so this became my new basis.  I ended up with about a $60,000 loss when it was all said and done. 

Hoping that I am correct and can offset this loss against my ordinary income for 2015 as opposed to it being a capital loss that can only be offset against capital gains.  Does anyone out there have any experience selling at a loss?  Any help or guidance is much appreciated!!!

Thanks!

@Jem J.  

Hi Jem,

I am out of state looking to purchase turnkey in Philly. Any advice on areas or property managers? Are you using a turnkey provider to rehab and manage your properties? 

Rich 

Hi @Mai Vo,

I was curious if you have pulled the trigger on a turnkey property. I am in the same situation you were when you posted this to the forum. I have been researching Philly, Memphis and Indy and am looking to purchase in the next month or so. Any update is greatly appreciated!!

Thanks

Rich