All Forum Posts by: Bruce D. Kowal

Quote from @Wayne Brooks:

Quote from @Bruce D. Kowal:

The depreciation recapture rules only apply if you took accelerated depreciation.  If someone does this a lot, you may want to choose straight-line depreciation, and avoid messing with recapture. This is termed §1250 gain.  Initially you will get greater losses from accelerated, to be sure.  Upon recapture, some of that benefit will be taken away.  Maybe somewhere, someone has modeled this, with and without.  Just something else to mess with your head!

Say who, what?  Upon a sale(without doing a 1031), you have to recapture All depreciation taken, period.

I apologize for being misleading.   All depreciation is recaptured.  But if you take straight line depreciation it is treated as Capital Gains, and taxed at more favorable capital gains rates.  If you took accelerated depreciation, then the recapture is taxed as Ordinary Income. 

Humor:  get a job as a Port Authority cop.  Or ticket-taker on the LIRR. . . .With those jobs, you will be able to move out, and save money for real estate investing.  Don't put the cart before the horse!

The depreciation recapture rules only apply if you took accelerated depreciation.  If someone does this a lot, you may want to choose straight-line depreciation, and avoid messing with recapture. This is termed §1250 gain.  Initially you will get greater losses from accelerated, to be sure.  Upon recapture, some of that benefit will be taken away.  Maybe somewhere, someone has modeled this, with and without.  Just something else to mess with your head!

Go to California State Society of CPA's website.  They will give you referrals of competent CPA's who are well versed in real estate.

There is a Special Allowance of $25,000 for losses from a rental activity for someone in your situation.  That means that losses up to $25,000 are allowed to offset your W2 income - - but you can't make too much money!  The loss is completely phased out when your Modified Adjusted Gross Income is > $150,000.  All is not lost, however.  Whatever your losses may be, they are "suspended" [A Magic Trick]. They are called "disallowed losses" and are carried forward to future years.  When you finally sell the property, you can then, at that time, deduct those losses.

These are the Passive Loss rules, which Congress set up to curb some pretty wild "abuses".  You need professional help with this.  Don't try it yourself using T*rb* T*x unless you have an idea what the outcome should look like.

I have an office in a Co-working space in New Bedford.  Groundworks.  The City definitely seems poised for take-off.  Not sure about Fairhaven, yet.

Go the website for your State Society of CPA's.  They will give you referrals.

Another example of how Prudence and Thrift are penalized.

How does this increase the supply of "affordable" housing?  It's just another tax.

Quote from @Seidy Lasker:

@Randall Alan

Sorry, my question wasn’t clear. I am talking about state taxes, not federal taxes. Federal is cut and dry. I am wondering for state sections for part year residents of 2 states, if the federal rental losses would flow down to where the rental is located for part year residents and nonresidents. I know if it was just federal and 1 state, then everything from federal flows down to state but it’s different when there are part year returns and nonresident returns.

 You are on the right track. It's a question of sourcing the income for the period of time when resident and non-resident.