All Forum Posts by: Christopher Cousin

@Account Closed Best of luck to you in your investing. The answer to your tax question depends on whether or not it was an investment property for the seller.  If the seller lived in the house for 2 of the previous 5 years, $250k in capital gains is tax free if he is single, and $500k is exempt for those who are married filing jointly.  If the property was held as an investment, then you can structure the sale to save on taxes via owner financing. 

For any tax question, you should definitely consult with a CPA.  I recommend Kohler and Eyre over at  http://kohlereyrecpas.com/. There are not local to Houston but they are knowledgeable when it comes to tax issues that affect real estate investors.  You can check out the Mark Kohler podcast for additional education on tax and legal issues.

@Scott Robinson Without the proper tax entity a fix and flip deal is taxed at the highest possible rate for an individual.  Without the proper entity, you pay your ordinary income tax rate (think W2 wages) and you have to pay both the employee and the employer portion of employment taxes since you are considered to be self-employed.  When consulting with your CPA about the appropriate entity to use for your flipping business, ask about ways to set your entity up so that it is taxed as an S-Corp and how that can potentially save you thousands on taxes.

For additional legal and tax related educational information, check out the Mark Kohler podcast.  If you are looking for a great tax firm that focuses on entrepreneurs, check out:

http://kohlereyrecpas.com/

I wish you the best in your investing!

@Tristan S. When discussing entity structures with your CPA, make sure to ask about having the LLC taxed as an S-Corp or setting up an S-Corp for your wholesale activity and PM activity. Your CPA can help you to design a strategy for your specific situation, but having theses activities taxed as an S-Corp can save you thousands in taxes. Also, a good resource for tax and legal education is the Mark Kohler podcast. Let me know if you have any additional questions. Best of luck with your real estate business.

@Tommy Mosley If you are open to working with a credit repair agency to help improve your credit score so that you can refi, PM me and I can send you some information. I wish you the best in your investing.

@Nate Denning The true value in working with a qualified CPA is in tax planning.  Anyone can plug numbers into a computer program, but a qualified CPA can help you to set up entities and provide advice on how to conduct transactions in a way to minimize your taxes.  You definitely want to talk to a CPA that specializes in RE. A good resource for tax and legal education is the Mark Kohler podcast.  I wish you the best with your investing.

@Joe Koppel The true benefit in a CPA is tax planning, not tax prep. Plugging numbers into a computer program that spits out a tax return to file is an easy process.  A qualified CPA is far more than a tax preparer.  They can advise on how to set up entities on the front end and how to structure transactions to help you save literally thousands in taxes in some cases.  I wish you the best in your investing.  You should also check out the Mark Kohler podcast as it has a wealth of information on tax and legal issues.

@Josh Calcanis What are some of the issues that you are running into with your excel system?  Also what features are you looking for?  I might be able to suggest an option for you but I would need to know more about what your needs.  

@Nate Denning  The true value in a qualified CPA is not in income tax return preparation.  Anyone can plug numbers into a computer program that will spit out a tax return.  The true benefit that a qualified CPA provides is tax planning.  A CPA can help you in structuring transactions or choosing the right entity/strategies to maximize your tax deductions. Your CPA should be a trusted advisor for your real estate investments. 

Also, a great podcast that discusses tax and legal issues is the Mark Kohler podcast just in case you would like to improve your own knowledge in these areas.  I wish you the best!

@Dana Whicker Sorry to hear about your troubles.  It must be frustrating for your wife to work so diligently to improve her credit score only to have an massive error cause so many issues.  Please feel free to reach out to me for a referral to an excellent credit repair company that works to help people remove errors from their credit reports.

@Carlos Gonzalez A good CPA can add tremendous value to your business.  For example, a CPA can help you structure transactions to maximize your tax savings down the road as well as provide tax planning services. Just make sure that the CPA you work with has experience in the real estate industry.  As a rental investor, you should ask your CPA for ways to help you maximize your depreciation expense, and which assets can be included for depreciation.

For great informationon tax/legal issues, check out the Mark Kohler podcast.

@Ashly B. For tax purposes, an LLC is taxed the same as a sole proprietorship. Having the property in a LLC can provide legal protection if the business is operated correctly. You should consult with a lawyer to determine how to best utilize the legal protections of an LLC.

Owning a rental can provide tax benefits, and you should aim to keep good records to maximize your tax benefits.  Consult with a CPA that specializes in RE transactions.  You can also listen to the Mark Kohler podcast, as it provides great info on tax/legal issues. 

Best of luck and let me know if you have any additional questions.