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All Forum Posts by: Alice He

Alice He has started 3 posts and replied 10 times.

Post: PPR Note Fund Still Performing as Expected?

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

Invested in their 6 month liquid fund in March. So far so good. Currently in the redemption process with that fund, to invest in a higher rate/longer term fund.

Post: Missouri Real Estate Tax Loss from Non-Resident

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

I live New York and invest in Missouri rental properties. Every year, I've been filing Missouri Non-resident tax returns with no tax due because we've been at a loss each year. 

Not sure where to report each year's losses (or carry over losses) so when we actually sell or make money on the properties, we can have prior year losses offset it! 

Would appreciate any advice or recommendations of an MO accountant!

Post: Norada capital investment

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

Curious about their promissory note offering as well! Anyone invested in their notes offerings?

Post: Kansas City Property Management

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

I have properties with One Stop Property Management and they are great! Feel free to PM if you have any specific questions.

Post: Tax Questions - from the First Time Homebuyer

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

Thanks for the comprehensive explanation, Ashish! Is my understanding below in line with your explanation? Wanted to provide a summary in case anyone in the future wants to refer to it as well.

For an individual:

1. Investigative (education, conferences, travel to check out a general area of properties) expenses before any rental properties purchased = cannot be deducted.

2. Acquisition expenses that can be pinpointed to a property before any properties in portfolio = capitalized. 

For an entity: 

1. Investigative (education, conferences, travel to check out a general area of properties) expenses before any rental properties purchased = if expenses qualify as start up costs, $5K expensed immediately and rest is deducted over 15 years.

2. Acquisition expenses that can be pinpointed to a property before any properties in portfolio = capitalized. (Same as for individuals)

Expenses on a new property that did not work out: 

Some CPAs immediately deduct and some capitalize cost to another property because those expenses are usually not large for small taxpayers. 

Post: Tax Questions - from the First Time Homebuyer

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

With tax season around, I'm sure there are others scrambling for answers to their tax benefits. I have interviewed a few tax accountants and have one in mind. But, I'm trying to arm myself with some tax knowledge so I can review his return.

Prior to buying a first home, we generally have expenses such as consulting a guru, attending RE conferences, buying education books or incurring plane/meal/hotel expenses to visit properties (assuming the trip was pre-planned with R/E business in mind).

In my case, I had those expenses, plus performed inspections of a property that I ended up not buying. But, a few months later, I did buy a place in the same city. 

I’m curious as to whether and how the expenses above can be expensed or capitalized. For reference, expensing = decreasing your passive income now to pay lower taxes now. Capitalizing = decreasing your passive income over time to pay lower taxes over time.

It seems the IRS categorizes expenses associated with acquisition of real property as (i) investigatory, (ii) facilitative, or (iii) incurred before placing the rental in service.

(i) Facilitative = Capitalized Expenses

Examples: Application Fees, finder fees, home inspections, broker/appraiser fees and others listed under 1.263(a)-1(d) - for those who want a comprehensive list

(ii) Investigatory are expenses to help determine "whether or which" properties to buy. They must NOT be facilitative expenses and can be expensed immediately.

(iii) Incurred before placing the rental in service. 

Examples: repainting walls, refinishing floors, etc. Things that are thought to normally be expensed because they seem repair costs, are instead added to the basis of the property if it was incurred prior to placing building.

Source: https://keitercpa.com/wp-content/uploads/2012/02/C...

Putting the above read to practice, would this be an appropriate conclusion?

1. Expenses for consulting, attending R/E and travel expenses such as plane, meal and lodging to check out a property, educational expenses can be immediately expensed. Meals can only be deducted at 50%, while the rest at 100%. (input in 1040 Schedule C)

2. Inspections performed for a property that I ended up not buying can be added to the basis of the property that I bought later in the year. This was a tricky one. I'm surprised that inspection costs for one property can be transferred as basis for another property.  After asking a few tax accountants and reading on BP, that seems to the conclusion. Anyone know why or can point to some rule?

Post: Reviews for KC Metro Homes

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

My boyfriend and I visited KC back in April and met up with a few turnkey companies. Feel free to PM for experiences!

Post: Process for Tenants in Common

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

Understood, thank you!

Post: Process for Tenants in Common

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

@Corina Eufinger Thanks! It does sound easier with just one joint checking, saving and credit card. 

@Jeff B  Thanks for the definition, Jeff! As tenants in common, is it okay if we share different proportion of profits and expense, such as profits 50/50 but expenses 70/30 (say, he wants a new carpet but I don't, so he pays the extra).

Post: Process for Tenants in Common

Alice HePosted
  • Investor
  • New York City, NY
  • Posts 10
  • Votes 3

Hi!

I'm planning to purchase real estate with my boyfriend as tenants in common, since purchasing through an LLC is complicated with his visa status.

Does anyone know what the process is to become tenants in common? For example, do we pay a lawyer to draft an agreement like a deed, or is it as simple as signing a paper when asked who has title to the property?

What bank accounts should be opened for book keeping purposes? We're thinking of the following, but it seems like a lot!

1. A joint checking account for rental deposits and joint expenses.

2. Individual real estate related checking account that we individually fund to pay for expenses incurred on the joint credit card and when I want to transfer rental income from the joint account.

3. A joint credit card for expenses incurred on the property.

4. Individual credit card for when we want to keep track of expenses we indivudally incur related to real estate (eg. REIA membership dues, business meal, etc)

Any guidance would be much appreciated!