Being clever when dealing with IRS and State at the same time

[Bruce D. Kowal]

IRS CP2000 Notice: Why Real Estate Investors Need to Think State & Federal

Quick story that could save you thousands in tax exposure...

Had an investor client who received a CP2000 notice for unreported rental income. Everyone said respond immediately. We didn't. Here's why:

The Multi-State Chess Game:

• Client had properties in 3 states

• Each state has different deadlines to assess taxes

• Federal changes trigger automatic state assessments

• Timing the response saved $45K in state taxes

🏠 Real Estate Investor Pro Tip:

States can't assess back taxes if their statute of limitations expires before federal changes finalize. Strategic timing matters, especially with multi-state portfolios.

Real Example:

Investment property sale in 2019

Federal noticed unreported gain

Two states involved

Timed response to fall after state deadlines

Result: Only federal adjustment applied

Investors: What's been your experience handling tax notices across multiple states?

Want to dive deeper into multi-state tax strategies for your portfolio? Drop your questions below.

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