All Forum Posts by: Steven Hamilton II
Steven Hamilton II has started 25 posts and replied 5110 times.
Post: filing taxes in a community property state? advice appreciated
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Why are you filing separately? Student loans?
Post: Business Trips: Spending Airline Miles or Charging
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Michael Glaser:
@Steven Hamilton II To repeat. Using my miles for business travel would be wasting them if I can afford to pay for them through my LLC through my business SWA card.
What percentage of travel is tax deductible for further clarification?
100% of the travel is deductible if it is for legitimate business purposes. Your business is allowed to reimburse you for expenses that you paid out of pocket. Have you ever prepared an Expense report for your 9-5? It is the same process for your own business.
Yes, I confirmed exactly that Don't waste them on business travel. Use them for personal travel.
Post: Possible to convert an IRA to a Roth with investment properties?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
The conversion would be done it doesn't affect the asset. There may be titling issues unless it is held by an LLC inside of the IRA.
The biggest issue would be the cost out of pocket to roll it over. It cannot be done partially. (you cannot roll over a percentage of a property etc.
Post: Business Trips: Spending Airline Miles or Charging
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Purchase business trips and redeem for personal. Miles/points have been determined to not be taxable. Cash back is taxable income/reduction of expenses.
Post: 50% partner owes CA taxes now attached to our rental property
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Daniel,
I would need to know more about the letter. Feel free to reach out to me and I'd be happy to explain the letter.
Post: Tenants vanish 1 mth before lease end, owing thsands, what to do?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Lala Weiss:
Bob b. Thank you. I have and now am going to forward to a collections agency. You make a great point.
William Hochstedler: Yes its in Utah. I'm considering the collections options.. anyone have a good suggestion? Can you expand what you mean on the cost of collection? Its a tricky situation becuase even though my lease does have fees for early exit and unpaid amounts, I can't locate the cheeky buggers and don't want to break any harassment laws.
Fradel Schaechter: THANK YOU!
Tom Radus: Wow this is some excellent guidance here. Can you maybe expand on what you mean about doing due diligence and choosing judgement proof tenants? I'm not sure if I follow. I did due diligence before selecting these tenants, they were ideal in every sense (a great example of not judging a book by its cover for me).
When you say to 1099 them, can you elaborate? This is a new tactic for me.
You cannot 1099 tenants who have not paid you. As you did not pay them anything. A lack of income is a lack of income which means nothing to claim.
Post: cost segregation study
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Gaurav A.:
@Ashish Acharya and @Steven Hamilton II
This is helpful.
1. By personal property you mean primary residence? Or that includes investment property as well?
2. Do you or anyone on this group know of someone who helps with cost segregation study? and can help with the determination whether it is a good idea or not for the property I am chasing after?
1. Personal property consists of certain types of components such as appliances, counter tops etc the items we depreciation faster than 27.5 years.
2. Yes, I know several. Where is the property? What did you purchase it for? A quality study that is backed up by case law will run over 4k. That would mean if you were at the highest bracket it would need to save you over 10k in deductions to justify the cost. And here is the kicker, it may save you that in the first year, but if you only plan to hold it for a couple years, that benefit is diminished by the fact that you will not have as much of a time benefit from the additional deductions.
Post: Tax Question 1099 Form
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Was this for a rental property? If so, there is no requirement to issue a 1099. If it was not then yes, you do. You should have all contractors fill out form W-9.
Post: cost segregation study
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Ashish Acharya:
It always makes sense to do it if you are knowledgeable about the asset classes and depreciation. If you don't incur any or significant cost, the cost seg even for a SFH will yield good benefit because of new 100% bonus depreciation. But, How confident are you?
Can you defend it against IRS? IRS has mentioned that it needs to be done by qualified individuals.
For a SFH, a CPA or knowledgeable accountant might be qualified.
It won’t make sense to get It done via cos set firm at sfh level. You would likely get a cost seg firm to do multimillion dollar property, but for some thing this small, if you just bought a property and added new appliance and improvements, it is easier to separate assets.
I wouldn’t say DYI because it is not that easy, but your CPA might be open to do it per your request and based on his/ her first experiences or skills.
Also, you have to account what is your long term strategy? How do you valu the “time value of money”.
When you sell the property, the depreciation taken on the separated personal property will be recaptured at ordinary rate vs max 25 % if not cost segregated.
Also, you no logner can do 1031 exchange on the personal property after the new tax reform, so cost seg might not be ideal if you plan to do that in future.
Something to think about.
Also
Ashish,
There is more to that to factor such as can the deduct the losses currently. How will the PAL affect them later what will their tax bracket be. As you mentioned lack of 1031 for personal property is a major item to keep track of.
Per the ATG and case law you really should have an engineer study done if you want a true cost segregation and not a hacked Cost seg that may or may not hold up. Most accountants do not have the background in RE Construction etc to even consider doing a cost segregation.
Post: cost segregation study
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Typically it is not cost effective to do so on properties under $1m