Can I still write off some expenses for last year w/out LLC ?

[Jeremy Karja]

Hi BP,

Quick tax question. I am setting up my LLC this year but I have some RE expenses from last year? With other businesses in the past I still wrote those off I thought without an official business set up but I may have set up a sole proprietor.

Also, if I can do that should I set up expenses under my wife or myself.  My wife stays at home with the kids without any earned income and I have the W2 income.  We are both going to be doing the RE together and she started her RE training to get her license late last year.

Any thoughts are appreciated!

Jeremy

[Basit Siddiqi]

@Jeremy Karja

You don't need a business entity(LLC, Corp, LLP etc) to start take taking deductions. Many businesses operate as sole proprietorship.

The one thing to be concerned about is if the costs you spent last year were "start-up" expenses. if they are - you may need to accumulate them and expense/amortize them when you "start" the business.

If you are in the rental real estate business - it won't necessarily matter whether the income is earned under your name or your wife's name since it will be reported on your joint tax return.
If you are generating income that is subject to self-employment taxes(flipping or managing real estate); it may make a difference whether the business under your name or your wife's name.
if under Wife's name - you may pay more overall self-employment taxes; however, she will be credited with social security being paid in.

If you are unhappy with your CPA - There are many CPA's on BP who work with real estate investors remotely.