All Forum Posts by: Sean O'Keefe

 Will you send me a copy as well? Thanks

 Will you send me a copy? 

My portfolio and tax complexity has grown in 2024 and I need a skilled accountant to help me make sense of it and file my taxes. 

I own a rental property through a single member LLC (say LLC-A) and I am in process of purchasing another property under the same LLC-A. Currently, I am self managing all the operations. LLC-A is a disregarded entity for tax purposes and I report the rental income/expense on Sch-E.

I want to setup a management S-corp (LLC-B) to look after the management of properties owned by LLC-A. For this I plan on charging 10% of rental income as management fees to LLC-A.

Some of the benefits of this vertical integration brought by LLC-B is:

(a) Ability to contribute to retirement plans (solo 401K, etc)

(b) home office deduction

(c) health insurance plan premium, among others. 

Some of the issues I have clarified so far from this and other forums:

1. Is juice worth the squeeze? --> Definitely. If the management fees stay in Sch-E, it is exposed to ordinary income both at Federal and state level, which is way higher than SE taxes of 9.55% (15.75-6.2 (personal social tax already maxed out)).

2. Why make passive rental income active and pay self-employment? --> Passive income doesnt mean tax free income. It is in fact taxed at much higher rate as ordinary income. 

3. Business justification of LLC-B --> This is can be a problem. However, I see this as a vertical integration and bringing more capabilities in house to make more money instead of hiring an outsider firm.

My question is such a setup valid? Has anyone done this without creating troubles with IRS? Can there be any issues due to business purpose of LLC-B? Want to hear opinion from the experts in the field here.

Hi All 

We have two properties under seperate LLCs in MO. One is a 4-Plex under a 2 member LLC (My wife and myself) which we closed in Jul 2024. Other is SFR under a single member LLC (my wife) which we closed on 5 years ago. We also have W2 Incomes. We are looking for a CPA who is well versed with Real Estate Tax Laws and Strategy that can help offset our W2 Taxes with our investments and can also file our 2024 Taxes. Thanks

Our long standing CPA recently lost her house and office in the Southern California.   She is taking time off to get her personal life together.  I am therefore reaching out to the forum for CPA suggestion in the Glendale/ Los Angeles are?

Thank you

Hi, my wife and I started an Airbnb in Sacramento, CA, this year and are new to real estate investing. According to our understanding:

1) California does not recognize REP status, but we could claim it on our federal taxes, is this correct ?

2) The minimum hours required are 750 hrs, but if running a short term rental, 100 hrs is supposed to be adequate, is that still true ?

3) Is there an official IRS form where these hours are documented, or would an excel file suffice ?

Any guidance would be most appreciated, so we can be better prepared for our tax returns next year.

Thanks so much for your time !

Cliff n Marie

I would love a copy as well, just getting started with Real Estate Pro. @Anita Paris

Thank you for posting.  Could I please get a copy@Sean O'Keefe

Wondering what everyone's experience is starting an LLC or sCorp to purchase your investment properties under? I live in CA, and I am looking to purchase a STR in Big Bear, CA and a LTR outside of CA.

Would it be best to start an LLC or sCorp in CA and deal with the astronomical annual fees? Or could I start it somewhere else, even though I would be conducting most of my business out of CA?