All Forum Posts by: Jake Hottenrott

@Oleksandr Ivanovskiy - I’m going to politely but firmly disagree with @James Mc Ree.

Many CPAs are general practitioners and will literally try to do any tax return that walks into their office. While a general CPA should be good enough to do a basic real estate return, I see many many returns that I review miss basic deductions.

I would look at the Tax Pros on this site. They are typically niched in the real estate investing world. Also, your ideal CPA isn’t going to be just compliance. They are going to be forward facing planning and tax strategy. Nearly every traditional CPA works solely on compliance and just “does” tax returns.

Best of luck!

@Joe Taft - The best part about Texas taxes is the lack of personal income tax.  This is a great opportunity for you to find a tax professional that focuses not just on compliance, but rather on forward facing strategy to help you create your real estate future.  It might be a little late in the game (the start of tax season) to interview a lot of tax pros, but reach out to a few that you see active and posting on here.  Especially if they have a lot of votes and provide value on their posts!  Best of luck!!

@Lisa Casey - Sorry to hear about your series of unfortunate events.  In short, since the rental was out of service from July 18 to present, I'd report income and expenses up until that date and then capitalize the expenses addition until it's placed back into service.  Hope that helps!

@Adam Rasmussen - great minds

@Alex Howard - Your short term capital gains tax rate is the same as your regular/ordinary income tax rate.  You stated that this is from a flip, you will likely be also looking at self employment taxes as well.    Any additional details on the flip?

@Michael Plaks - Not the crime of the century?! I bet you let your clients round their mileage up to the nearest whole mile too ;-)  Haha just kidding, I agree with you that it might not be splitting hairs, but I was just trying to really nail down that technical piece of a $70 software transaction :-D 

The easiest way to look at this is what does TurboTax charge for your personal and then the upgraded version for the business.  I'd deduct the difference.  

Yes.

Get yourself a nice big umbrella insurance policy. Cheaper than an LLC and the coverage extends to your primary home, auto, etc. the only additional tax deduction available to an LLC that isn't available to a sole proprietor is the fees an LLC must pay.

@Justin Schoemehl - Congrats on passing the real estate licensing test.

I'd fall into the camp with everyone who says to start an LLC and more importantly, make sure that you have an operating agreement in place. While the LLC could definitely be something that you put off, it will give you a business structure for the future. Missouri LLC's are cheap to set up, just make sure that you work with an attorney and a CPA so that when it comes time for taxes or any liabilities you have yourself covered.

Best of luck!