All Forum Posts by: Bruce D. Kowal

Terrific article by WSJ writers about what retirement actually looks like if you are managing rental real estate.  There may be a paywall here, if so, contact me and I will send you a PDF copy of the article.

https://www.wsj.com/personal-finance/real-estate-landlord-in...

More on this:  How Delaware Statutory Trust Ownership Structure Work

Your CPA's took a "short cut"  They included the 2022 depreciation along with the 2023.  So you can't go back and take the 2022 depreciation again.  In other words, if the annual depreciation were $10,000, they amended the return by reporting $20,000 of depreciation for 2023.  You have your refund of $7k.  

As for the Cost Seg studies, did you really give those to your CPA's in advance of the 2022 tax returns?  Did you make them aware of the nature of those studies?

I don't know how anyone can prepare a real estate tax return without some consideration give to the actual cost of the structures themselves. What kind of dox did you give? A full rental P&L such as seen on Schedule E? DST's are complicated. What was reported to you? Are you one of several investors?

How to report Delaware Statutory Trust Income

You know what?  Leave it alone.  And next year, make sure you and CPA"s and the administrator of the Trust are all on the same page.

The IRS in its Passive Activity Loss Audit Technique Guide published a sample Activity Log.  Page 4-16.   [The copy/paste here is not the best.  But you get the idea, and, hey, it's the IRS own format!]

Exhibit 4.4: Activity Log Business/Property:__________________ Year:____________ Complete the following by day:

________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________

Under penalties of perjury, I declare that I have examined the information contained on this worksheet, including attached worksheets and statements, and to the best of my knowledge and belief, it is true, correct and complete.

__________________________________ ___________________ Signatures (both spouses, if married) Date

Reg. § 1.469-5T(f)(4) provides that reasonable means for proving hours may include a statement of services performed AND approximate hours based on appointment books, calendars, etc. To meet his burden of proof under IRC 7491, the taxpayer must comply with the recordkeeping requirements of the regulations.

Ahhh, I see.  You want free and accurate tax advice from complete stranger on the internet.  :)

 Agree.  I can't imagine a divorce attorney, as an example, simply giving away free advice to complete strangers.  Especially based upon incomplete facts.  If you want professional, solid tax advice, you need to pay for it.  Otherwise, you know, you get what you paid for.  Which tempts me to tell everyone to put their real estate into S Corps, because you might save on the Health Insurance portion of SS taxes.  :)

Try it.  Maybe you will end up in Tax Court with a case of first impression.  People will cite your name.

Does the S Corp actually hold title to the property?  Why on Earth did you put it in an S Corp?  You are in a world of tax pain doing that.  Maybe you have some capital loss carryforwards lying around.