All Forum Posts by: Steven Hamilton II
Steven Hamilton II has started 25 posts and replied 5110 times.
Post: 2018 Tax Horror Stories
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
So many stories from so called tax experts on here who had no experience prior to opening their business. It costs more to fix it and only hurts the investor.
I'll be running an after tax season special to review and fix the mistakes I've seen.
Post: Trying to understand Duplex tax laws ...
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
That is reported as one property coded as multifamily on the Schedule E.
Post: filing 1065 - claiming deductions with no income yet
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Eric Tomlin:
@Linda Weygant and @Steven Hamilton II
We created a multi member IRA LLC for the sole purpose of purchasing land. There are no buildings on it. We have had no income and the only expense we have had is property taxes but we don't need to expense those because they are very minimal. Because this is all new to us, we filed a 1065 last year. But, while filling out our 1065 this year we came upon what
@Steven Hamilton II is saying above, and it sounds like we do not have to file. @Linda Weygant, do you think because we filed last year, we should continue filing?
Also, inside our IRA LLC is a Roth and a Traditional. In 2018, we did a conversion of 20% from the Traditional to Roth. With this added complexity and info, do either of you think we should file a 1065 for 2018?
Thanks in advance!
I sure hope the correct elections to capitalize carrying costs were made... Technically yes since there is a deduction it must file a return.
Post: Excess Business Interest Expense 163(j)
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Is it that it could have been bonus depreciation in the previous year.
Most individual real estate investors will not find themselves limited under 163j.
Post: 1031 cash boot - please help!
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
The full 50k would be taxed as you are considered to have removed your gain first.
Post: Schedule E / 1065 / Ownership
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
I wouldn't be too concerned as member-manager you would be in control of the entity.
Post: filing 1065 - claiming deductions with no income yet
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
No if there is no income or deduction and no filing requirement there cannot be a penalty for not filing.
Post: filing 1065 - claiming deductions with no income yet
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
You actually are not required to file a partnership return if there were no deductible income or expenses.
"Who Must File Domestic Partnerships Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes. Entities formed as LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partnerships."
https://www.irs.gov/pub/irs-pdf/i1065.pdf
Straight from the instructions.
My advice if it will make you feel better have the CPA file and extension and handle it outside of tax season when its not so busy as there should only be balance sheet and capital account entries.
Post: Two Flips Do I File Cap Gains Or Sch C?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Linda Weygant:
Agree with Natalie Kolodij - flipping is rarely capital gains, regardless of the holding period. Pretty much the only way you can get it to capital gains is if you showed the intent to buy and hold for investment, but some extenuating circumstance caused you to flip instead. Note that you may get away with this only once or twice. If you continually have these "circumstances" that convert your rental to a flip before you even had a chance to rent it out, the IRS will likely reverse all your flips over the course of the current and prior years, in the event of an audit.
The OP should get with a qualified CPA to discuss possibility of tax savings with an S-Corp, but this may not be a magic bullet depending on a whole host of other factors.
Don't forget that can also mean an understatement of income causing a six year statute to open if they used a 1031.
Post: Two Flips Do I File Cap Gains Or Sch C?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Sam Shueh:
ordinary income not capital gain(>1 year).
You're not qualified to give tax advice. Please do not do so.
What you stated above is 100% incorrect and will set you up for a lawsuit. Stop perpetuating incorrect information.