All Forum Posts by: Ahad Ali

 Hello, 

They will not qualify for 500k exemption. They will be eligible for 250k exemption. They need to be married for 2 years or more to qualify for 500k exemption. she does not necessarily need to be added to the title to get the exemption after 2 years of marriage.

Hi @Aytaj Vily

It is ideal to open up a LLC. LLC will give you the protection against personal liabilities for certain debts and claims against business. Also if you income is above $150k then you won't be able to claim any of the losses on real estate business unless you have an LLC. With an LLC you can claim all the losses without having any income limitations. I would suggest you talk to a tax expert to discuss further regarding this topic to see the best outcome for your 2024 taxes.

Hope this helps! 

Finding a CPA wo understand real estate will pay dividends in the long run, so take your time to research and select someone who is experienced and reliable. It's also a good idea to start talking to some well before tax season to ensure you have enough time to make an informed decision. Also I would not only focus on local CPA's. There are a lot of virtual and remote CPA firms that are highly experienced in the real estate field.

Yes this is a doable but you must make sure you pass the 3 test set by IRS be able to take the STR loss including the substantial services test. You may want to consult with a CPA to discuss in more detail and get specific advice.

A sole proprietorship is an unincorporated business and the default choice for anyone who runs a business but hasn't set up another formal business structure, such as an LLC.

As a sole proprietor, there's no separation between your personal and business assets and expenses. You are personally responsible for all your business's debts and obligations on the personal side. However, an LLC is taxed the same way as a sole proprietorship, but an LLC can elect to be taxed as an S corp or a C corporation. I would suggest you talk with a tax professional to get more detailed information regarding the LLC election.

As an SMLLC, you may claim a home office deduction and other miscellaneous expenses. Since you are located in NY and LLC is formed in Indiana, you need to pay Indiana state taxes as well. It's better to contact a local CPA firm that specializes in real estate. Flipping properties can still be eligible for 1031 exchanges under certain conditions. The IRS has strict rules that taxpayers need to follow to defer taxes. Again, book a meeting with a CPA who has experience with 1031 exchanges and real estate.

I would recommend to start investing locally. Since this is your first time you would be able to learn a lot while dealing with the process which might not be the case if you buy something out-of-state.

Regarding tax benefits, you might want to talk with a CPA or tax professional in order to make sure you are getting the full benefits. You might need to spend 100 hours to 500 hours a year working on the property depending if you are planning to do short term or long term rental investment to claim real estate loss. Since your income is over $150k, you can not claim any rental loss unless you are actively participating in the rental business.

Hello,

If you are willing to work remotely, there are lot of CPA firms in NYC area who are specialized in real estate section. Just keep in mind real estate loss can be used to offset your ordinary income. 

Generally, you would depreciate it over 27.5 years since it is an Airbnb platform. And there is passive income loss limitation of $25k per year and the excess loss can be carried over for the next year. It will start to phase out when your income reaches $150k.

I would suggest you discuss with a CPA who specializes in real estate and have a more in-depth conversation to give you a better understanding of your situation. You will be able to write off a lot of expenses which will help you out eventually with your taxes.

Hi @Zachary Bellinghausen

There are a lot of CPAs on this forum that should be able to assist you on how to get started on this and move forward appropriately and I highly suggest you reach out to them. You may also want to consider reaching out to a Financial Advisor as well to get additional input and information.

The key focus here will be properly reporting the roll-over from the 401K into your Self-Directed 401K and making sure you are able to do so without any hiccups. Most CPAs should be able to assist you with setting up entities that would best benefit you after going over your specific details.