All Forum Posts by: Cary P.

I'm looking at commercial space, not housing, but good to know. I used to live near Roxboro & Knox just on the other side of 85, but heading up that way was always a little low rent. We are probably heading in another direction with our exchange, but good to know Braggtown is finally revitalizing! 

@Kevin Greenwood, that's how it was in 1999, as well.  I lived on the other side of 85 from there, my house was 2.5 miles away from the hospital.  The south side near Church's was always kinda sketch - sounds like it still is.  Carver north, SECU, was starting to clean up.  I was hoping it had moved closer to the hospital.  That Food Lion scared me then!

Hey guys,

I grew up in Durham, graduated from Jordan & State, lived near Duke Park (Knox & Roxboro Rd), but that was 20 years ago.  My parents still live off Garrett & 15-501. I have a commercial opportunity in the Braggtown neighborhood near Durham Regional and I'm wondering if it is starting to revitalize or if the area is still kinda sketch.  My parents don't go to north Durham ever except to visit my aunt who lives near Northgate, so they aren't really a help. I figure a building in NC gets me home twice a year on the business dime, so I'm hoping to take advantage of it.

Thoughts?

Thanks!
Cary

The $2.8MM includes the $380K depreciation, so is it $2.4MM and $380K? That's what I'm trying to understand. Sounds like $2.4MM would be cap gains taxed at 20% and the $380K is recapture taxed at 25%.

I was looking at more like $700K - $920K.. That's why I need to know.  If it's closer $700K, for our own reasons, we are willing to take the hit, if needed.  That extra $200K is where we start questioning our reasoning.. So, if anyone's an accountant or tax advisor type, I'd love the verification of my numbers.  This, of course, is worst case scenario. But with both the real estate and stock markets the way they are, it might become reality for us.

Fed: $460-$575K

Medicare: $87-109K

Recapture?: $65-95K

State: $107-135K

Total: $719 - 914K

So, does the $380K make my cap gains jump to $2.8MM or stay at $2.4MM? Is the $380K taxed at 25% max or ordinary income of 32% max, assuming no other income? Does the 20% pass-through apply here?

I'm reading conflicting on NOLO (https://www.nolo.com/legal-encyclopedia/taxes-when-landlords-sell-rental-real-estate.html) and IRS (so I assume IRS is the correct one, https://www.irs.gov/publications/p544#en_US_2017_p...) that the depreciation recapture is ordinary income or depreciation recapture is only 25%.  I'm not sure which is true, but I calculated the 35% above based on the $380K tax bracket for married filing jointly

Hey guys, as we all know, this is a crazy real estate market right now. My husband and I are selling a multi-unit and we are trying to figure out what happens if we cannot execute on an exchange.. Is my math right? Worse case, I'd go into an Inland or NNN portfolio if we are in dire straights. If my math is right, I'm not sure we would want to cash out...

Purchase + Cap Improvements: $2.1MM

Depreciation: $380K

Sales Price: $4.82MM

Cap Gains after fees / expenses: $2.48MM

These are the top bracket taxes I came up with:

Paid on the $2.4MM:

- 20.00% cap gains

- 03.80% Medicare surcharge

- 04.63% Colorado state tax

Paid on the $380K:

- 35% Depreciation Recapture

Does the $380K get added into the $2.4MM for a computed MAGI of $2.8MM, so we are paying taxes multiple times on that money, or not?  Am I missing something that would greatly impact the taxes either in my favor or not? Does the 20% pass-through apply here? :D :D

Thanks!

Great, thank you! I thought 75% was too high.. I'm ok with about 50%.  Thanks for the info..

Cary

Hi Folks,

I just received an unsolicited marketing letter from a legal firm in the Allegheny County Pennsylvania area.  I purchased a rental there last April.  This guy says he can lower my property taxes by challenging the County on the assessed price of the property.  I paid $105K for it, it is assessed at $120,700.  The thing is, he wants 75% of the first year's refund - about $725 contingency commssion.

1.  I'm not a sucker, contingency or not, I'm not paying 75% of the first year's savings.

2. What is the process for challenging the property's assessed value? Is it something I can do from Colorado?

3. I live in Colorado, but a friend is renting the house from us; the house is under an EIN, etc, so this is a company, not just a DBA or Schedule E. Is it worth fighting? If this guy, or someone else for a smaller commission, can successfully lower my property taxes for several years at a savings of about $80 a month, I'd like to go that route because we aren't making any money on the house and won't in the foreseeable future.

4. Do you know someone who can do the same job for less of a commission?

Thanks for any advice!

 The PM isn't the problem.