All Forum Posts by: Ahad Ali

Hi Luca, we can definitely help you with this if you're interested. We do remote tax work for clients in all 50 states. I would love to connect with you! 

Quote from @Matt Doepke:

Hi BP! Thanks in advance for your insights - I just purchased my first real estate investment property a couple months ago (2023) and looking for some tax guidance. 

I purchased a single family home under my LLC and have been renovating it to be STR-ready (weeks away before we launch!). I have not rented it out to anyone yet. I have records of all expenses the business has contributed to the reno.

I am curious what tax benefits I can claim, if any, specifically:

1. There is no income generation to report in 2023, but can the business claim any losses?

2. Can I depreciate the property despite not being rented?

3. Do I need to file a Schedule C/E?

Much appreciated for anyone's knowledge on this topic!

Hi Matt, 

You can take the depreciation on the property once the property is ready and available to rent. If your income is above $150k then you won't be able to claim any of the losses on rental property if you are filing it as Schedule E. Then you might want to file it under Schedule C. However, if you plan on selling the property in near future, Schedule E would be ideal in terms of tax breaks for the gain. I would suggest you talk to a tax expert to discuss further regarding this topic to see the best outcome for you.

Hi Chris, you are not required to obtain the sales tax certificate.

Quote from @Dante Ritchey:

Hello everyone,

My brother and I got our first multifamily back in August and are starting to think about good old taxes. Do you have any advice when filing / a good CPA that you may have used in the past local to the Worcester MA area? 

Appreciate all the help!

Best,

Dante Ritchey 

Hi Dante, 

There are many CPAs on this platform that you can reach out. You can try looking for someone local to you or there are a lot of CPAs who provide great remote service. We are based in New York, but we do provide services in all 50 states. We're happy to connect if you're interested. 

Quote from @John Morgan:

We have 25 SFR that I self manage. My wife retired a few years ago due to our strong RE cashflow. What are the advantages of claiming her as a real estate professional? We show a loss on the rentals due to depreciation and write offs. My income is over 150k so I'm not sure if claiming her as a RE professional will help us in the future. Any advice?

There are many tax advantages involved in real estate ownership, however, there are additional perks available to those who qualify as real estate professionals. Rental real estate losses are usually considered passive activities and are subject to passive activity loss limitation rules. However, a taxpayer who qualifies as a real estate professional and materially participates in his or her real estate rentals may avoid these passive loss limitations and is able to deduct rental real estate losses against other income sources. Since your income will cross 150K without claiming as real estate professinal, you won't be able to take any of the rental losses. I would suggest you talk to a tax expert to discuss further regarding this topic to see the best outcome for you.

Hi Rohnn,

There are many CPAs on this platform that you can reach out to.  There are a lot of firms who provide great remote service not just locally but out of state as well. At Ahad&Co we specialize in the Real Estate Industry with a host of clients from owners, investors, developers, bankers, attorneys, brokers and agent. I am also a Real Estate Investor myself. Currently I own small multi-family in NYC and PA. Our office is in New York, but we offer remote service throughout all 50 states. We would love to connect with you if you're interested.

Quote from @Hannah Potter:

At what point in your RE Investing journey did you hire a CPA to do your taxes? At one rental? At ten rentals? After creating a business? Trying to determine how much longer I should do my own taxes. Thanks!

Hi Hannah, 

CPAs can provide ongoing support and guidance throughout the year, not just during tax season. Establishing a working relationship with a CPA can help you make informed financial decisions, stay in compliance with tax laws, and achieve your long-term financial goals. It's never too early to seek their expertise, so consider your financial situation and goals to determine the best time for you to hire a CPA.

Quote from @Mark K.:

Looking to see thoughts on selling rentals and investing them in Reits through a 1031 exchange. Our properties have more than doubled in value and it seems like the return may be worth more than the headache of owning them at this point? Also wondering if anyone has feedback as to a good real estate tax advisor in our area?

Thank you.

Hi Mark, 

1031 exchange is a excellent way to potentially grow your portfolio without incurring taxes when selling property if the intent is to buy a like kind property with the proceeds. While this is the general premise, there are certain circumstances which may trigger taxable events and require tax payments to be made. There are steps required to be followed before selling to ensure it is a eligible 1031 exchange.

It is important to discuss this properly with a CPA or Lawyer who is well knowledgeable in this field to properly structure the exchange so you can be properly informed regarding your specific circumstance. There are many professionals on this platform whom you can try to reach out to or look for someone available in your area or remotely.

Quote from @Dave Craig:

Title kind of says it all. Need a good CPA on my team to help with tax planning, etc. Any good recommendations? 

Hi Dave, 

There are many CPAs on this platform that you can reach out to. I would recommend you get a CPA who is also an investor. You can try looking for someone within your state or find someone from a different state. There are a lot of firms who provide good remote service. We are based in NY, but we do have clients throughout the country. We would be happy to help if you're interested. 

Quote from @Angus Brooks:

Hey All- I own a small apartment complex in a two entity LLC and am wondering what the tax implications are for a cash out refinance. I have done a lot of these for my own portfolio, but am wondering if the tax implications are different if we do a cash out refinance for this partnership LLC and then have to "distribute" the funds to the members. Both of the members of the LLC we are hoping to do the cash out refinance for are also LLCs if that matters, so it would be distributed from one LLC to another LLC to hopefully the members pockets.

Want to make sure that the money remains tax free the whole way and we don't have any surprises. Thanks for any advice you can give!  

Hi Angus, 

A cash-out refinance is typically not considered a taxable event for businesses since the borrowed funds are regarded as liabilities owed to the lender. When filing the LLC return, it is important to ensure that these liabilities are accurately reflected on the balance sheet.

However, it's essential to note that distributing the refinance proceeds among LLC members could potentially be viewed as a taxable event if there is no intent to repay these amounts to the LLC. The tax treatment in such cases may vary depending on specific circumstances. Therefore, it is advisable for the client to consult with their CPA to receive personalized guidance tailored to their unique financial situation.