All Forum Posts by: Zachary Bohn

@Henry Li unfortunately if you do that, the interest won't be deductible. The interest tracing rules would apply and if the money isn't spent on the rental property it isn't a business expense

@Christopher Smith I agree, but in your situation you may not owe Ohio and could keep things simple and just owe California. Ohio has some weird tax laws, just making sure you know businesses don’t really pay tax and that cities have their own individual tax returns

You'll have some issues due to self rental rules and keeping track of everything. Anything that has a personal component to it really shouldn't be put in an LLC at all.

@Christopher Smith I just meant that in general business income in Ohio isn't taxed on the first $250,000, and a flat rate of 3% on the amount above that, which for most people would mean most people wouldn't pay tax on rental income. Hopefully you are filing all city returns that are due as well

@Aaron Moayed In the reverse credit situation (if it applied) would be:

California resident buys Indiana property. You calculate the tax due on the rental profit according to California rates and pay California, then on the Indiana return you wouldn't owe them anything (assuming the tax rate in California is higher). You won't be double taxed on the income (at least for taxes based on net income)

Feel free to message PM me if you have more questions

@Aaron Moayed are you talking about the reverse credit section of the notice?

Do you currently have a CPA you work with? If it is just one property you might be fine to continue with them. If you don't have one. A RE CPA pretty much anywhere can help you. 

I'm a CPA in Ohio but can handle everything virtually. If you have any questions let me know.

@Moe Juran This is more dependent on the use of the property. If you are going to flip the property it would be best to probably put in the S-Corp. If you are going to hold and rent then a Single Member LLC would work. An S-Corp is not a good place to hold rental properties in.

As mentioned you can sell and buy another property via a 1031 exchange, but if you are wanting to sell completely you can also seller finance and spread out some of the tax hit if the property doesn't have a mortgage

Will the housing be used for the kids of the investors?

@Christopher Smith with the way Ohio's tax is setup you probably had no tax or very little right?