All Forum Posts by: Steven Hamilton II
Steven Hamilton II has started 25 posts and replied 5110 times.
Post: Can anyone recommend a great Chicagoland Tax Professional?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Hi Brad,
I have a few referrals in the area. Where are you in the city? Also make sure you Check out the seminar X Plus Real Estate is putting on the 19th of February.
Post: Taxes on Private/Hard money loans?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
That entirely depends upon if the lending activity even rises to the level of a trade/business:
Scallen v Commissioner 2002 and Cooper v Commissioner TC Memo 2015-191
- the total number of loans made;
- the time period over which the loans were made;
- the adequacy and nature of the taxpayer’s records;
- whether the loan activities were kept separate and apart from the taxpayer’s other activities;
- whether the taxpayer sought out the lending business;
- the amount of time and effort expended in the lending activity; and
- the relationship between the taxpayer and his debtors.
Post: Multi-Family Syndication & Tax Depreciation
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Bill S.:
@Spencer Gray I have to disagree with Natalie on the $350 Gain. While I am not a CPA, here's how I understand that the calculations @Scott Blackwill and you are requesting will work.
- $200K acquisition, sold for $500K: Capital Gains tax rate on the $300K Capital Gain taxed at capital gains rate
- $200K acquisition, current basis at $150K due to depreciation: $50K Recapture taxed at your ordinary income rate
Maybe Natalie was answering something else - as there is a taxable event on the entire $350K, it's just how it will be taxed that is important to understand. Again, consult your tax professional.
Natalie is correct and that the gain is $350k. 50k of that may be capped at 25%
Post: Multi-Family Syndication & Tax Depreciation
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Spencer Gray:
@Nick B. and @Taylor L. pretty much summed it up.
You can further defer or shelter capital gains by:
- Never sell the property
- 1031 or “like-kind” exchange into another property
- Additional paper losses from other real estate assets
- Passing the assets down to ones heirs giving them a stepped up basis
- Refinance the asset before sale to reduce realized gain
Check out my write up on the benefits of investing in commercial real estate that is specifically focused on investing in syndications.
Spencer,
A refinance will do nothing to change the basis or adjust the gains.
Passing it down to your errors requires a person well, to you know, drop dead.
Please do not give tax advice that you are not qualified to give all that does is make every accountant here have to work that much harder because of incorrect information like that. There is no way I'd refer a client after that comment and that write up.
Post: CPA always "too busy" during tax season - acceptable?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
@Bruce GardnerThank you for the context. I had missed it during my glance at your OP. He was either too lazy or WAY too busy for his own good. Quality support staff can be a hard thing to find for this profession.
What I will tell you is we have a digital calendar that our clients schedule their appoints with. It allows use to earmark time for different tasks such as this based upon who in the firm is available.
Post: SDIRA LLC in Colorado but rental property Arizona, Accountant?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Stephen Craul:
Hi BP members; Formed an LLC registered in Colorado (state of residence) using self directed IRA (wife & I) in 2016. Finally purchased a residential single family home in Tucson, Arizona July 2019 using 50% mortgage to afford the property. Property rented out and generate UBIT due to the debt service. Would love to do taxes on this myself as the Colorado accountant has been charging over $500 on the 2016-2018 T-990 tax returns, and estimates the tax return fee would increase to $800 minimum for 2019 return as more complex. Basic question is whether an accountant in AZ would be a better choice (as AZ is where the rental property is doing buisness) or stay with the CO accountant. Also, currently doing QuickBooks myself and wondering if its possible to do a turbotax filing with this entity or too complex and accountant best option. Thank you.
You SHOULD NOT prepare those yourself. You have a formal partnership return which requires a balance sheet and basis tracking and then you also have two Form 990-Ts plus schedules. You'd be looking at over 2k with my firm. All three are complex and butchered accountants let alone someone who does not have tax experience. You get what you pay for. Don't be cheap when it comes to protecting your investments.
Post: SDIRA LLC in Colorado but rental property Arizona, Accountant?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Eamonn McElroy:
$800 for one 1065 and two 990-Ts is dirt cheap...
Way cheaper than market rates. I'd be concerned as to their accuracy and experience in preparing them. $800 for a 1065 alone is cheap.
Post: CPA always "too busy" during tax season - acceptable?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
So what you're telling me is you brought him a situation and you asked him to prepare a document or fill out a document for you and he charged you his premium rate during premium season makes sense to me. You're assuming that it was 15 minutes of time unless you were sitting in front of him while he prepared the document which may have required referencing other material I wouldn't make direct assumptions.
It is possible it was just beyond his capacity at that moment. All forms have different workflows and staffing.
What you're saying is 15 min may not have been. That said I agree that certain needs have to be addressed and that's some in my firm we have allocated for.
I agree with your opinion to shop around if you're unhappy.
Post: Earnings too high to claim passive losses?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Brittany R.:
I make over 200K from my full time job. Spoke to my CPA about. He told me to start an LLC. I started an one...now I can claim all of my losses. Done deal,
It can only offset passive gains the net is zero it cannot offset your wages without being considered a real estate professional.
Post: Earnings too high to claim passive losses?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Brittany R.:
@Loic Assobmo I'm sorry, I didn't explain. I meant that now I CAN have deductions from the losses bc I have them in my LLC, not in my name. I'm not sure what the limit is now.
Entirely wrong. You're CPA is setting you up for failure and an audit.