All Forum Posts by: Steven Hamilton II
Steven Hamilton II has started 25 posts and replied 5110 times.
Post: Property Investing: ROI Tax Question
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
That would depend upon your tax rate and the net taxable profit of your rentals. We can't just give an estimated percentage. I would also need to know your state; however, you have provided us nowhere near enough information.
Post: CPA is refusing to include solo 401k in the tax return
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
More information will be needed; however, what are the reasons they are saying you cannot contribute?
Post: CPA is refusing to include solo 401k in the tax return
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Does the income have a net profit? If there is no net profit from SELF EMPLOYMENT INCOME you cannot
Post: Retirement Planning for Real Estate Investors
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Ashish Acharya:
There are no plans that let you put in tax deductible qualified retirement plan contribution if you don’t have a earned SE income.
If you are not active participants in your employer 401k, both you and your spouse can contribute 12000 to Deductible IRA if tax is your main concern right now. There is no AGI limit.
Also,if retirement plan is concerns of yours, why not employer 401k. It is tax deferred and you must be getting free match up to 3%.
There will not be many options until you have your own active businesses, such as flipping.
Also, you need to consider HSA. It is tax deductible plus tax deferred and can also be used as retirement accounts after age 65 without any penalty of 20%
Same with 529 plans, series EE/I bonds, they grow tax deferred although not deductible, you can use them as retirement if your child gets scholarship. No penalty there.
There are many other planning done to meet your needs. You need to sit down with CPA/CFP to analyze your needs.
Actually to correct the above statement on Traditional IRAs:
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $193,000 and $203,000, up from $189,000 and $199,000.
Post: Taxes- How to report rental properties
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
You are required to maintain copies of your receipts and documentation to prove deductions in the event of an audit. Your bank statements are NOT enough. There is no way to show WHAT you paid for. Only that you incurred the expense. by having the receipt you can prove what you purchased.
https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping
Post: Question for CPA RE REPAIRS
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Mauricio A.:
Are property repairs (say e.g. to foundation tax deductible?)
For a primary residence no.
For a rental property, they will typically have to be capitalized and depreciated over time due to the resulting improvement in the property. As a result of a catastrophe, they may actually be considered a repair depending upon what was done and what the cost of said work was.
Post: Need CPA with motel/real estate experience
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Alice Yip:
My husband and I set up two Wisconsin LLCs to purchase two motels in Wisconsin in June 2018. Through one of these Wisconsin LLCs, we purchased a small apartment building in Michigan in July 2018 that we are still renovating so no income in 2018. These two LLCs are single member LLCs owned by our Wyoming LLC which my husband and I each own 50%. We live in CA. Our attorney told us that our Wisconsin LLCs don't need to report on the federal level. My husband and I closed a self proprietorship business in CA in June 2018. Spoke to 1-800-accountant and got a quote of $2700 for all necessary personal and business filings. Also got another quote from a local WI CPA. I saw bad Yelp reviews for 1-800-accountant. Any CPA here who can help? Or anyone knows any CPA who can help?
I can refer you to @Jake Hottenrott @Natalie Kolodij or @Linda Weygant they all have worked with them extensively. You will have to file a partnership return for the WY LLC which will include the information for the properties. The Rental will be considered rental income; however, the hotel unless you lease it to someone else who manages it it is considered a business activity.
$2,700 does not sound unreasonable for a partnership and personal return depending upon the information on each and your records as you are required to maintain a balance sheet for the tax return.
Post: Questions to ask a CPA?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Please stop giving incorrect advice there is a difference between something that as a deduction in something that is required to be capitalized. Not all rental real estate is a trade or business.
Post: Operating expense or capital improvement?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Brandon Hall:
Sorry, the cite I have is Malmstedt v. Comm’r., 578 F.2d 520 (4th Cir. 1978) which deals with deducting expansion costs as ordinary expenses when one's activity rises to the level of a trade or business. I misinterpreted the case when I read it a couple years ago and wrote that article.
The deductibility of repairs will largely depend on the Tangible Property Regs and your placed in service date.
Still incorrect information as that unit of property is prohibited from service until the other portions are completed. So you could have a building that is 50% in service and that unit then has its own places in service date. The case cited above does not satisfy the questions being asked as there are matters of restrictions on the unit of property being available due to other units of property within in it.
Post: Operating expense or capital improvement?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Brandon Hall:
Sorry, the cite I have is Malmstedt v. Comm’r., 578 F.2d 520 (4th Cir. 1978) which deals with deducting expansion costs as ordinary expenses when one's activity rises to the level of a trade or business. I misinterpreted the case when I read it a couple years ago and wrote that article.
The deductibility of repairs will largely depend on the Tangible Property Regs and your placed in service date.
Which means you should correct your false article that you've had sitting in here for how long spreading false information.