All Forum Posts by: Steven Hamilton II
Steven Hamilton II has started 25 posts and replied 5110 times.
Post: Texas LLC, CA LLC Tax?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Helen Zhang:
@Logan Allec @Steven Hamilton II Thank you for the response, your contribution to this thread is super helpful. I am curious if my LLC would incur $800 LLC fees as well. My LLC is texas LLC and it has a property in California. I am a Texas resident and I am actively managing the property. Is it fair to say that it will not incur $800 LLC fees?
If your LLC owns or operates property in CA, you are subject to the tax. You should be paying the $800 franchise tax and filing all applicable forms including Form 568 annually.
Post: How do you calculate Capital Gains on primary-turned-rental?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Bob Taylor:
"the Depreciation Recapture is on the amount of depreciation allowed or ALLOWABLE, so even if they didn't take depreciation, they still get the recapture upon sale."
If I understand this correctly, there is never a good reason to not take the depreciation on the rental home on each year's taxes...yes?
In some cases in this situation it's better to correct the depreciation in the year of sale to adjust gain rates or offset income in a higher bracket.
Post: Schedule C for Airbnb Income
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
It will go on schedule E and is listed as non passive therefore it will offset other income. Natalie is entirely correct.
Post: Solo 401K rental investment with a recourse loan
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
As long as the loan does not have a guarantee of the beneficiary of the retirement account it is perfectly fine.
Post: 20% pass through deduction
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
IGNORE THE SAFE HARBOR. Your rentals qualify if you are treating it as a business with a profit motive. It is actually detrimental.
Tax Court Case: Hazard v Commissioner discusses rentals being considered a business.
Post: Advertising for rent during renovations for tax deduction purpose
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Natalie is exactly right. The CPA who advised that is extremely incorrect and you're begging for an audit of you do that.
Post: ROBS - Cashed out my 401K plan with no penalties to start C-Corp
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
It is not a cash out as that would've been a taxable transaction. You need a good accountant who has the experience to give you thorough advice on ROBS. Its investing your account into a corporation that is running a business. ROBS is good for active business activities. It is NOT good for rentals, notes etc.
Not everyone works extensively with these. Granted, I'm one of the few who teaches professionals on the topic. Be very careful in vetting someone to work with. The time to get advice and decide HOW you are going to invest with it was before you opened the corporation.
Post: House Hacking and Filing Sole Proprietor or Self-Employed
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Nathan Grubb:
@Steven Hamilton II hey cool! I actually work in Grayslake.
Small world. My office is actually at 83 and Washington next door to Hillside Restaurant.
Post: House Hacking and Filing Sole Proprietor or Self-Employed
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Nathan Grubb:
My wife and I purchased our first how this year. It's a duplex and we are hacking it, living in one of the two units. One of the bedrooms in our unit is used solely as an office for our business-related work (or at least it was last year; it's a baby room this year).
While reporting the rental income, and taking deductions, would it be better to file as self-employed or sole proprietor? Or, do I even need to declare something like that? What have you found to be the most beneficial?
Some other points of interest:
Yes, we own the property in our names.
No, we don't have an LLC or any other kind of entity.
I have a W2 job, and up until September, so did my wife. However, she did not quite that job to do real estate, she quit to go back to school.
I have a meeting with a CPA coming up, but after hearing so many horror stories of CPAs claiming they know real estate when they don't....I was hoping the BP community could give me a feel for the wind.
@Natalie Kolodij thanks for the tag.
Nathan, How's it going neighbor? I agree it is difficult to find someone who knows what they are talking about.
Here is a great link to help you: https://www.biggerpockets.com/...
My office is right in Grayslake.
Post: What to look for in CPA?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Here is where I would start your search:
https://www.biggerpockets.com/forums/51/topics/795929-questions-to-ask-a-potential-accountant