All Forum Posts by: Scott Vance

@Jason Munger  I have a ton of questions.  As a tax pro I see a couple ways this can go.  Each with their own pluses and minuses.  I would recommend employing a tax pro, the advice that they give will be far more valuable than the amount you pay them.  

@Danny N.  The IRS taxes the sale of land in foreign countries in the same way it does for land sold in the US.  So in this case the sale of your property minus the basis equals a gain which would be taxed on your US tax return minus some credits given for potential foreign taxes you may have paid on the transaction.  The stepped up basis in property I am not so sure of.  I am talking way out of my lane here, but I think a significant determination that you need to figure out is to see where the person you inherited the property lived at the time of death.  I think if they lived here in the US you probably follows the rules like you said, it passes to you with a stepped up basis but if they died in another country all bets are off, I have no clue.  I would check with an attorney/CPA that specializes in this, I suspect that will be pretty expensive but doing it wrong I could imagine would cost you more.  

@Manson C.  If you were losing 25K each year you definitely are doing something wrong.  If you had more than $25k in losses you could carry it forward to a year that you can use it so you don't lose it all.  

@Fred Rivers definitely involve a tax pro as @Brandon Hall suggested.  As Brandon says it seems to me not to be a gift if you are paying for it.  

@Young Moon  I am thinking the legal entity has little impact.  I searched IRS regs to find it written but I think that you can roll the costs to find the property, to include mileage and travel into the basis of the property and deduct it as depreciation expense. Not as lucrative as expensing it but still get it deducted.  I will try to find this written in IRS regulation, but I have been having no luck so far. 

@Peter Duncan  In my tax practice I would be very careful in this situation.  If you have had absolutely no rental income for a good reason, ie going through a lengthy eviction or home damaged  and being repaired that might justify it but in my mind not having any rental income is a red flag.  

@Joshua Locke I concur with @Brandon Hall   Also as a retired Army guy I would advise you not to use the on base free tax preparation service.  I used them my very first year many years ago with my first rental.  Later on I was very sorry and soon saw the value of paying for a competent tax pro to be in my corner.  I ended up  saving more in tax suggestions/strategies than my first tax pro cost me. 

@Mikaela C.  Take a look at the paperwork creating the trust.  The trustee is required to value the property at the time the trust is created.  That would give you the basis.  Look at the tax returns of the trust.  That will give you accumulated depreciation and the annual amount of depreciation taken.  I would also make sure to review the records and look for any repairs or improvements that may need to be included in the depreciation that may or may not have been taken by the trustee. 

@Doron Nisenbaum  As an enrolled agent in my practice I advocate using quickbooks or wave.  I like wave because it is free and a little more easier than quickbooks.  In the past I have used a spreadsheet but I find the other choices provide much more depth and flexibility. 

@Eric Schrader  As both a real estate investor and an enrolled agent I concur with the advice provided by @Ted Lanzaro

Not having an Enrolled Agent or CPA on your team to help with these questions early on in the process is a fatal flaw from my experience.