All Forum Posts by: Chris McCormack

Hey Kyle, there are some great advisors working remotely these days. I would focus on the latter more than the former. Best wishes!

Find a tax advisor who specializes in real estate and tax planning. Work with them year round to discuss your goals and changing tax profile

S-corp is not the strategy for holding property. A couple reasons why:

1. S-corps are limited to 100 shareholders. If you go the route of raising capital and investing in commercial real estate, you will be left disappointed when you can only get money from the first hundred people who commit.

2. S-corps have strict guidelines on taxable events. Specifically contribution of property and sales of interest are both taxable events within the s-corp. If you refinance a property or contribute another, it will trigger a taxable event which defeats the purpose of a refi.

3. S-corps are created to mitigate the self-employment tax that comes with LLC. You rarely see this with the ability to generate losses with real estate and therefore a loss in the s-corp would defeat its purpose AND restrict the amount that some of your owners could deduct.

Feel free to reach out to me directly with specific questions but it helps to know S-corp is not the move for holding property.

There are a lot floating around the forums. I would find one who specializes in real estate and does year round tax planning rather than the prep at year end. 

Most of the cost seg companies offer audit protection in their services. You're gunna want the peace of mind that comes with knowing you're covered rather than worrying about the audit on the horizon.

Agreed with @Kevin Sobilo - mortgage lenders look at different numbers. The IRS will ALWAYS look at net income - bring it down my friend

Hi Jeet, I would focus more on real estate focused over location. Many CPAs are working remotely these days. That said, try to get a grip on their risk appetite and view of the tax code.

For a solid real estate or entrepreneurial CPA you may pay more than what others will but it will pay itself back in savings, peace of mind and compliance. The last thing you want for tax advice is wal-mart prices and wal-mart quality. 

Be wary of CPAs who tell you the cost seg is not worth it. While there are pros and cons, it can be of great benefit when taxes are expected to be high. For example - if you're a real estate broker with a lot of income outside of rental income, cost seg can work wonders in bringing that down. However, if you're W2 and can't unlock passive losses, it may not be worth it. While your question requires more than a quick answer, that can provide you with a little more insight.

Property taxes are calculated based on fair market value. Counties / governments are usually quick to provide the assessments when properties have gone up but not so quick when properties have gone down. While you may be out of luck for this year, if property values go down, as some expect to occur, don't hesitate to reach out for a reassessment.