2018 Tax Horror Stories

[Account Closed]

I hate to be a downer, but with a significant overhaul of the tax code recently we are seeing first hand some RE investors (and individuals) get hit with huge tax bills and sometimes penalties.  There are tremendous benefits in the new tax code, but can be very challenging if you're not working with a pro.

Was curious to hear some "horror stories" out there.  Maybe cautionary tales that can save investors tens of thousands of dollars in mistakes.  I'll provide one we came across....

We met with an investor who cashed out all of their retirement accounts (under 59.5 years old) to invest in an opportunity zone.  The problem was it was not a qualified opportunity zone FUND, they just bought the  properties and proceeds from retirement accounts are not capital gains!  Throw in the 10% penalty in addition to the income taxes owed on the distribution and these individuals found themselves with close to a 6 figure tax bill.