All Forum Posts by: Steven Hamilton II
Steven Hamilton II has started 25 posts and replied 5110 times.
Post: In search of Real Estate investor CPA/Tax specialist near Chicago
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Thanks for the mention everyone.
Post: Searching for CPA: Initial Fee?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Michael Plaks:
Originally posted by @Steven Hamilton II:
I agree with MOST of what @Michael Plaks said with the exception of firm size as it should not matter.
That's more than we usually agree on :)
Firm size matters because you may have someone other than the owner to conduct interviews and/or consultations.
That said market rate is a market rate.
Post: Searching for CPA: Initial Fee?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
I agree with MOST of what @Michael Plaks said with the exception of firm size as it should not matter. If someone is under charging you may pay for it on the back end if they are not investing into themselves and a team. What if you need documents or something else while they are away on vacation or a health issue comes up.
One thing to consider is the number of clients we are each willing to take on. I'm taking on a limited number right now while we fine tune some processes and review any potential firm changes.
I know of one person here who received over 70 requests for consultations in January. I knew that feeling. I charge a consultation fee that is applied to the first service and very soon we are not going to be applying it. For those we take on it becomes free consultation. That said our time is our commodity. We get a lot of calls of people just asking questions. I haven't spend years and tens of thousands on education to give my knowledge away for free. I've answered a ton of things here while I was building my practice and I still give high level answers. However, that consultation is a barrier to my calendar. If you think my fee is high than you are not going to be a fit for my average costs anyway.
If someone wants to see the depth of my knowledge and an example of how we work and my knowledge they can look like here.
@Natalie Kolodij @Jake Hottenrott @Linda Weygant @Nicholas Aiola may all have some opinions.
Post: Figuring out my next step
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
A refinance will not change this. You have 3 years from the date you move out to sell the property and exclude the gain. You will still be subject to tax on the depreciation you take. I would strongly recommend you consider a conversation with a competent accountant.
Post: Need New CPA for Multi-State Return
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
lol. He just doesn't want to deal with the headache of all those states and in some professional software multiple states can be a pain or he pays additional per state. Most of us here work with clients everywhere Since you have an entity you need to have a balance sheet and when someone doesn't have one, prices go up.
Post: Need New CPA for Multi-State Return
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
I think that was cheap.
Post: How to keep contemporaneous logs for pass through tax deduction
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Easy, Avoid the safe harbor and look at the factor that its more than likely a trade or business. Hazard v Commissioner.
@Natalie Kolodij @Jake Hottenrott wouldn't you agree?
Post: IRA $10000 -- Downpay Investment Property then IRA First home Purchase
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Daren Card:
This is a great question and thread! I had this same question and good to know that if I buy a rental property that I do not reside in, I can still use this IRA exemption to use up to $10,000 towards the purchase of my own primary residence. Thanks @Brandon Cao and @Steven Hamilton II!
I'm going to resurrect this old thread with a couple of quick follow-up questions that may provide some valuable additional context to others:
1. Could my spouse and I individually purchase properties using this exemption with our individual IRAs? Ignore the awkwardness of living separately from spouse and assume we could logistically do that and were able to maintain separate primary residences after purchasing for a period of time. I'm just wondering if this could be done if you were able to identify properties and close on them simultaneously? Would it need to be simultaneous down to the second in order to avoid having one spouse technically own a primary residence very briefly before the second spouse closes, which invalidates the exemption for one spouse? Crazy hypothetical, I know, but wondering if it could be done.
2. Is there any limitation on the type of property? I'm guessing any 1- to 4-unit residential property will work like it does for FHA and other home-buying programs?
HI Daren,
1. I'd expect that you may run into only one issue with the 10k penalty exemption and that is the potential for getting audited; however, there is nothing in the rules to prevent it other than if you both live in the same new residence at any time. I'd make sure that both names are NOT on each house. This may be an issue in Community Property States.
I'd advice purchasing those not too close together in location and to time it fairly close.
2. Not at all. You can definitely do it with an FHA home.
Post: Will UBIT / UDFI apply here?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Typically capital gains is not subject to UBIT/UDFI. That said, certain margin items such as selling options CAN BE subject to UBTI if they hit the level of a trade or business. https://www.forbes.com/sites/greatspeculations/2017/07/23/what-the-law-says-about-unrelated-business-taxable-income-in-non-real-estate-investments/#3a1043de7584
IRA Financial Group is of the opinion it is not; however, I have not found any federal information that
https://www.irafinancialgroup.com/learn-more/solo-401k/using-a-solo-401k-plan-to-invest-in-options/
Post: Enrolled Agent? CPA? Tax Attorney?
- Accountant, Enrolled Agent
- Grayslake, IL
- Posts 5,272
- Votes 2,325
Originally posted by @Daniel Hyman:
A CPA is the typical route for tax, however there are plenty of EA's that are even more knowledgeable and tax savvy than CPA's.
It looks like you have asset protection questions as well, so you'll need to loop in an attorney at some point. If price is not too much of a deterrent, you'll likely get good advice from a tax attorney who can fill both roles.
Daniel, no need to credential bash.
An Enrolled Agent is licensed by the United States Treasury. An EA can work anywhere and is not subject to jurisdiction. EAs specialize in tax and study tax.
A CPA is licensed by his or her state. A CPA can audit financial statements (most don't do assurance work because of overhead and compliance costs). CPAs study account and potentially tax. It depends upon the CPA.