All Forum Posts by: Account Closed

For me, all these software never do it quite like how I want. At the end of the day, it always comes back to go ol Excel :P 

Welcome to the group Kwanza! I would suggest starting with what types of investments you would like to get into and goals. No one accountant is an expert in all areas in the tax code, so best to figure out what you want first in the world of real estate and then dive deeper there. 

For example: We provide tax preparation and advisory services to people who invest in commercial (including multifamily) real estate, and high w2 earners investing in short-term rentals. If either of those strategies sound exciting to you, you can reach out to someone like us once you have started investing to minimize your tax burden 

Quote from @David M.:

@Account Closed

If you don't mind me giving me my 2 cents...  I think I wouldn't take it...  Paying zero tax is inefficient in it of itself--- unless it was for the rest of my life or something...

Making use of the lower/lowest tax brackets and the standard deduction (being so massive nowadays) is a huge tax break in it of itself.

As mentioned, you only drive one's taxes higher (and/or higher tax brackets) in future years, especially with using up the depreciation faster.  Granted, that matters depending on the investor's strategy and goals.

Meanwhile, all this does is increase the work for the supporting professionals with more filings, paperwork, the potentially the 1031's, all for some tax savings in this year.  For this layman (i'll let you professionals figure out what is being sold here in this post), I don't see how your services benefits a long term investor like myself, or are really in my best interests.

Hey David! I really appreciate you giving your opinion here. There are a few beliefs here I would like to invite you to challenge, in the very least it's a good thought exercise. 

To respond to your response "Paying zero tax is inefficient in it of itself--- unless it was for the rest of my life or something..." That is indeed the goal! or get as close as we can as possible. Note that every year we would need to be buying property to maintain these benefits, as they only work in the year they are used. Unfortunately, there is no silver bullet. 

You are right that it increases the need for supporting professionals like us, but taking the long term outlook, I would say that a tax professional / accountant focused on the assets you are investing is imperative for success. As they say here on BP, you need to "build your team" and accountants are an important member of your team. If your accountant is not knowledgable in the area you invest in, you could be missing out on 10s of thousands of dollars of tax savings per year. 

How do services like this benefit you? 

The simple answer is it allows you to compound your money faster. Let's say we meet for 1-3 hours per year, and you pay for math's sake 2k out of a household income of 200k. out of that 200k house hold income you are paying (for examples sake) 50K in taxes (tho it is likely much more for most people). If we can save you 30k on your taxes via implementing these strategies, that is a 15x return on your 2k cost, since you are now not paying that to the government. Taxes are everyone's biggest expense of their lives, and if we can change people's situations by finding ways to get them savings, it can truly change lives. 

Quote from @Basit Siddiqi:

Quote from @Account Closed:

To leverage this benefit, prospective property owners must engage in short-term rentals and provide substantial services to guests, such as daily cleaning, meal provisions, or transportation services.

 I think there is some incorrect information regarding substantial services.

Please let me know what you think I got wrong! Im happy to update it or clarify. 

Hey Baha, 

Short-term rentals may be better for you from a holistic standpoint depending on how you earn your other income. If you have a w2 job, you could take advantage of the short-term rental loophole. Check out this short article I wrote on it to learn more:https://www.biggerpockets.com/forums/617/topics/1161394-call...

If you have a w2 job you may be able to offset losses created from the short-term rental, and then make more "after-tax money" in the end.  If you need an accountant who is highly acclimated to this area of the tax code, consider our firm. We specialize in working with real estate investors and I'm sure could do plenty for you! Our website is in my bio, head over there and fill out the contact form. 

Hey Shawn! We specialize in helping folks do just that! Please consider checking us out, we have over 25 years of experience in the tax prep world. We pride ourselves on being easy to work with, transparent and giving great value for money. Our website in on my profile, head on over there and fill out the "contact us" form so we can get a better idea on what your client profile is and how exactly we can help! Happy new year! 

Hey Kyle, we specialize in working with folks who are investing in real estate. Consider giving us a try for a transparent, affordable, and enjoyable experience! Our website is on my profile =) Happy new year! 

So, you've snagged that coveted real estate professional status, but what's next? Well, it's not all smooth sailing from here – you've got some hoops to jump through to maintain that status. Let's break it down:

First off, let's talk about the nitty-gritty – recordkeeping. No, it's not the most glamorous part of the job, but it's crucial if you want to keep the IRS off your back. Here's the lowdown:

1. Time Logs and Calendars: Keep a record of your work hours in the real property game, it'll come in handy in the unlikely event of an audit.
2. Contracts and Invoices: Hold onto those contracts and invoices like they're gold. They're your proof of real estate activities – and the IRS loves proof.
3. Educational Materials and Certifications: Show off your smarts with all those educational materials and certifications. They're not just for decoration; they demonstrate your industry know-how.

Now, let's talk about staying in the know. You can't rest on your laurels – the real estate game is always changing. Here's how you stay in the loop:

1. Continuing Education Courses: Keep learning. Take some courses, stay sharp, and impress everyone with your industry knowledge.
2. Real Estate Conferences and Seminars: Dust off your networking skills and attend conferences and seminars. It's not just about learning; it's about making connections.
3. Networking Events: Speaking of connections, attend networking events. It's not just a buzzword; it's a lifestyle.
4. Subscribe to Industry Publications: Grab a cup of coffee, sit back, and read up on industry publications. You'll thank yourself when you drop some knowledge in your next meeting.

Now, let's talk about the not-so-glamorous side of this status – the challenges and risks:

1. Time Commitment: Balancing this status with other professional pursuits? Yeah, it's like juggling – challenging. Be prepared for a time commitment.
2. IRS Scrutiny and Audits: Brace yourself; the IRS might start paying more attention to you. Audits are no one's idea of a good time.
3. Changing Tax Laws: Tax laws change, and that can affect your benefits and requirements. Stay vigilant and adapt.
4. Balancing Act: Trying to keep this status while also juggling other careers? It's a balancing act. You'll need some serious multitasking skills.

So, there you have it – a quick guide on keeping your real estate professional status intact. It's not all sunshine and rainbows, but with the right mindset and a bit of effort, it's more than worth it!

If you would like to chat further about how this strategy can benefit you, please consider DM or emailing me! Im happy to answer any questions. 

Quote from @V.G Jason:

Quote from @Kymberly Chase:

Yes I definitely would be open, I don't think my CPA is savvy with STR tax loopholes whatsoever

 Any CPA with basic real estate knowledge can get that done for you. You are a real estate agent, make your living this way but don't use one geared for it?

****, I am not even a CPA and I have learned how to apply this. As for the investment, is this as sound as you are making it out to be?

 100% V.G Jason is right. You should be using a real estate-focused accountant! Your biggest expense in your entire life is going to be taxes, why let them slow down your financial goals! I get passionate here because I see people's situations change when they learn about the tax code and how they were doing it wrong for X number of years and they wish they knew sooner. 

Quote from @Nate Meeker:

Love this strategy, many of my tax planning clients are executing this successfully across the U.S.

 Love to see it, Nathan! Lots of great savings to be had using this strategy for 2024! Happy new year