How the New Tax Code Affects REI w Amanda Han and Brandon Hall

[Mindy Jensen]

Big changes are underway in the U.S. tax code—and it could make a huge difference to your bottom line. Thankfully, today on the Big gerPockets Podcast, we get to sit down with two CPAs who focus entirely on helping real estate investors navigate the tax code! Amanda Han and Brandon Hall join us today as we dive deep into the new changes—plus tackle some of the most common questions new real estate investors ask!

Remember a few weeks ago when we asked for your questions? THIS is the episode that answers them!

Listen here or on your favorite podcast player.

[Logan Allec]

This was a great podcast!  Thank you, @Amanda Han and @Brandon Hall!

@Brandon Hall I have one question for you.  At 22:00 you gave an interest limitation example of you and your dad, just you and him, forming an LP with your dad as the 50% money guy, i.e., not involved in managing the business.  I'd assume that if it's just you and him, and he's the money guy, then you would actually be running the business.

I'm thinking that if you, as his son, actively participate in the management of the business, then his interest would not be treated as a limited partnership interest for purposes of the interest limitation rules and so you would not be treated as a tax shelter and so the interest limitation would not apply.

I could be wrong, but my reading is that the definition of "tax shelter" under Section 163(j)(3) (the interest limitation section) refers to Section 448, and 448(d)(3) refers to 461(i)(3), which gets you to 1256(e)(3), which says that an interest in an entity shall not be treated as held by a limited partner for any period if during such period such interest is held by the spouse, children, grandchildren, and parents of an individual who actively participates at all times during such period in the management of such entity (1256(e)(3)(C)(ii)).

Thoughts?