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Updated about 12 years ago on . Most recent reply presented by

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LEONID ORLOV
  • Investor
  • Hermosa Beach, CA
6
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42
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Tax strategy for multiple properties owner ..

LEONID ORLOV
  • Investor
  • Hermosa Beach, CA
Posted

I own 6 multi-family properties (3-4 units each) all are positive cash flow, I am wondering what is the better approach ?
1. To allocate income/expense to each property on Sch E (as I have done so far) or
2. To declare a property management business on Sch C and deduct common for all properties expenses such as car, management etc and to allocate individual property expenses/income to sch E for each property?

Another I idea I was toying with, is to pay property management fees to one-self (I manage properties myself) which can be (to a large degree) allocated to a solo 401k (because this is the part of business that qualify you as Solo proprietor)

Let me know if I am dreaming here .. or being terminally confused

Most Popular Reply

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5,271
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Steven Hamilton II
  • Accountant, Enrolled Agent
  • Grayslake, IL
2,325
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5,271
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Steven Hamilton II
  • Accountant, Enrolled Agent
  • Grayslake, IL
Replied

LEONID ORLOV,
Adam Demchik,

You would need to set up a separate entity and have multiple properties to justify that. You would pay the entity a management fee. You then would need to pay yourself a salary.

-Steven

  • Steven Hamilton II
  • [email protected]
  • (224) 381-2660
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