All Forum Posts by: David M.

@Kevin Luttrell oh, and I think the issue may be that since pretty much all accountants/preparers use a tax software, they follow whatever the software does. So, if the software doesn't let you do it, then they just blindly follow the software.  Either they need to figure out how to override the defaults, or perhaps you just fillout a paper copy of the return and mail it in...  good luck.

@Kevin Luttrell

Personally, I don't think you have to...  The only thing I've heard of having to take is depreciation.  Otherwise, it'd be as if the IRS will chase after you for not itemizing your deductions instead of taking the standard deduction.

For the same but different, I qualified for REPS the past few years but didn't claim it.  My cpa was well aware.

In your case, you just "fill out the forms differently."  The irs is going to going to come after you for paying more tax????

@Joel Hunt You MIGHT want to check on that 1099 form --- there are a bunch of 1099 variants and I don't know them all.

I guess it sounds like you are concerned that it looks like you made the principal and interest.  Obviously, you should only be paying tax on the interest.  Does the 1099 form break out those two numbers?  who issued the 1099?  A escrow/title company -- or how did you participate in this hard money loan?  Was it from the servicer of the loan (if you had one)?

I'd get the 1099 corrected to show the actual interest that you distributed.

@Alison S Interesting.. I'd figure it'd be when the Title is changed over to the son. The irs exclusion I thought was for ownership, which requires holding Title. If there is some exception for inheritance I don't know.

The step up in basis is on the date of passing.  The Trust should bypass probate the Decedent's Estate.  I'm sure there is some administrative time for the Trust to empty itself.  So, the clock should start when Title is transferred.

Obviously, if it takes some time to transfer you can build up some appreciation depending on market conditions, and good to know especially for the heir to sell in a timely fashion to take advantage of the exclusion.

Good luck.

Good luck.

@Michael Plaks Is it possible it can be expensed if you use an accounting method other than cash?  The only other method I'm aware of is accrual.  Or, perhaps if you were in public company their reporting requirements would be as such?  Thanks.

@Costin I. yeah, it looks more like an accrual or similar accounting method.  The "big/corporate boys" do that sort of accounting.  I'd ask Plaks perhaps about that, or your own cpa/accountants.  You don't run into this normally on this board.

@Norman Schultz

Wow, thanks for the followup. I'm not going to the DST route for that exact reason. I totally lose control of my funds.

I've been liquating my portfolio.  I'm trying to bring it up more, and certainly its somewhat specific to my circumstances in NJ, but so far I'm paying very little tax.  My built up Passive Allowed Losses (PAL) are offsetting most everything.  I'm so glad I went this way.

Even without it, the nominal 80% I'd keep I can still invest at a much better rate, or even spend to pay bills.

Good luck with your DST. I hope everything turns out well.

@Nicholas L. I'm scratching my head on that one...  Yeah, its only the ones looking to buy that are affected...  They are also the ones setting the market.

Lets face it, all real estate is really purchased by the monthly payment. the properties out west, more so pacific northwest, are dropping hard since their property taxes are relateively low and most of their PITI is the mortgage. So, since more of the payment is interest now, buyers just afford only lower total values...

The people staying in place are moot --- other than maybe helping to keep inventory low.

@Joshua VanName

well, sounds like the best use of your time is to work so you can hire people to do these cabins...

If you worked on the cabins yourself, you'd get paid back but much later when you sell.  And, you'd be paying long term capital gains tax.  That's where the lower cost basis comes into play.  But, I am guessing you need something to pay the bills today instead of in 10 years...

simply put, REPS is just the ability to take passive losses incurred that year onto your main 1040 return to offset your usual wages/salary.  Normally (yeah, bunch of income limits), passive losses can't be taken onto your main return, but are carried over year over year until you have net passive income to offset.  

some investors pushing to get more tax deductions try this to decrease their tax liability that year.  In certain circumstances I think that works.  However, in the long term I find it to be tax inefficient.  

Good luck.

@David Ramirez

I guess your question is the subject header of the thread?  And, I'm not sure where it connects with what you wrote, honestly...

The National Association of Realtors statistics is 75% of new real estate agents drop out in the 1st year, and 90% by the 3rd year.  Lets face it, its a tough sales business with 100% commission.  Not everybody is cutout for sales, and its a very low barrier for entry.  Just like real estate investing, its "sold" on how great it is...  But, that's just the marketing.

Meanwhile, i'm not sure what aspect of "real estate" you are asking or looking to discuss.  Sorry.