All Forum Posts by: Bruce D. Kowal

Well done, Michael!

Read this:  https://www.irs.gov/pub/irs-ms...

Go to section 2.1, bottom of page.   You might get some benefit.  Ask your accountant if you qualify.  His software can do projections based upon different assumptions.

I have no idea how much you earn.  Some public workers get paid a LOT of money.  Some get peanuts.

I usually post to tax issues.  However, the past year I have been learning the new ways of virtual marketing:  building an email list, using a CRM like KEAP to followup and/or solicit leads, converting leads, using one-to-many webinars etc.  All good stuff.  And ran across some very well-known practitioners in the field, such as Dan Kennedy ("Magnetic Marketing"), and Dean Jackson.  

You can get a flavor of Dean's ability on Youtube.  But he is really good at helping real estate agents.  And he has a website for this GoGoAgent.com.   Further, by subscribing to his regular emails, you can learn from a master.  

Usually, I would give links, but I don't want to appear to be a shill for Dean.  Too much.  But for those of you struggling, or new to being an Agent, you will discover a whole new world with Dean.  How to reach people, what motivates people etc.  He is the modern Dale Carnegie.  And learning about such concepts as "funneling" can't hurt.   Russell Brunson.

Now, some of this may be entirely new to you, or you are familiar.  I don't know.   But I have yet to see any of these concepts and tactics discussed.  

And this is an example of BP meeting its stated goals and mission.

Let me know if any of this is helpful.

Oh, yes.  The longer we are in business, the more tools we discover when he are injured.

If you paid anyone for services in 2021, more than $600, then you should send them a Form 1099-NEC.  It's not a favor, it's actually required by IRS.  If it's late, there is a penalty.  Less than $300.  You might get that penalty waived if you have reasonable cause.   But here's the thing, YOU may be on salary, and get a W2, or are getting 1099's form others.  YOU have to pay taxes, why should others skate?

Human nature is that we will avoid taxes, unless forced to recognize income.  

So, if you paid a Contractor last year to make repairs, chances are he is NOT reporting it.  Send him the Gift of Good Citizenship.  Send him Form 1099 and a copy to IRS.  Your CPA has the software to do this electronically.  Again, there are late filing penalties, especially after August, BUT you may get those penalties waived.  You start with asking him to fill out Form W-9. https://www.irs.gov/forms-pubs... 

If he refuses, then it gets interesting.  He/She is obviously trying to dodge taxes.  You tell him that if he refuses, you will send copy to IRS with notation that his tax id was not provided.  And you do that. It gets better, because IRS shares that information with the resident State.  So, both IRS and his State will be alerted.

Ask your CPA for help with this.

(Lawyers, too, get 1099's.)

Especially now, with the extended deadline of October 15 just weeks away.  That contractor will just love to refigure his taxes, and maybe end up paying more. 

(Heck, he may offer to pay you $, just to forget about sending that 1099!  You will resist that unethical temptation, though.  Won't you?)

Reach out and touch someone:  send them a 1099!  It's a small triumph for the honest taxpayer.  

If you will be the first person to run an AirBNB in a location. then you should be cautious.  Assume that the smart money is already seeking out good areas.   Follow the smart money, don't be a pioneer, unless you really, really know that market.

I assume that you already have a CPA who does your tax returns, and is accounting for your existing rental properties.   His tax software will allow him to model what you are proposing.  Plug in the short term gain from sale of a house, and see what falls out.

1]  Lots of questions about how to qualify as a Real Estate Professional.  The absolute best resource for this are the IRS Audit Techniques Guide for Passive Activities.  In particular Chapters 2 and 4.  This is written for IRS auditors, who are not rocket scientists.  You will be able to spot problems well in advance.  

Here is the link:  Passive Activity Loss - Audit Technique Guide

2]  Also, for those of you who have extended the due date of your individual tax returns, the deadline is October 15, and if you want to elect to group your passive activities, don't miss the deadline.

And if you have extended your entities, Corps and LLC etc., the deadline is one week from Thursday.

Tip:  always file something.  You have three years to amend.  

3]  Consult a CPA with some experience in these matters.  And if he screws up, remember, you can always amend.

Hold onto your cash.  Take lots of courses in the area on real estate and other investments.  Joing Meetup to meet other investors in real estate.  And as a former Navy Enlisted [E-6] who spent some time in Norfolk aboard ship, advance in your rates.  And, if young enough, go Officer or WO.  If you don't have a college degree, get one.