All Forum Posts by: Courtney Duong

Thanks Nicholas for the quick response.

Sorry @Nicholas Aiola , another question. So we have an LLC which has 5 members and I am 1 of the members (with the least %). I work full-time as a Property Manager for this LLC and get paid W-2. Does this make me a Real Estate Professional?

Thanks!

@Nicholas Aiola got it.  Thanks!

@Nicholas Aiola question on start-up expenses.  It says:  you can deduct up to $5000 in start-up expenses the first year your rental activity is in operation.  You must deduct any amount over the applicable limit in equal installments over the first 180 months you are in business.

This is where I got confused.  You can only deduct start-up expenses when you started your real estate journey with rental house #1 only?  Or you can deduct this start-up expenses for expenses incur before the listing of each rental house you own?

For example, let's say we start this real estate business in Jan 2020. Bought our rental house #1 in Feb 2020. After closing we spent $2000 on some cosmetic fixings to make the house ready. We then listed the house on MLS in March 2020. So for this house #1 do we count this $2000 expense as start-up expense or towards the basis of house #1?

Then in June we bought house #2.  Spent $3000 to make the house ready.  Listed the house in July 2020.  What will happen with the $3000 expense?  Can we deduct this $3000 as start-up expense for house #2 or no?

Then next year in 2021 when tenants at house #1 and house #2 move out and we have to do some fixings before listing them on MLS, can we deduct those expenses as start-up expenses on each of the house again?

Thanks.

They ran my personal credit too and the LLC has been in business for less than a year. Reason for denial: business is too new!

@John Alosio we have LLCs and last month when I applied for a credit card for one of the LLC we got denied too. And I have very good credit score.

Thanks @Christopher B. How about tax?  Still no penalty, and just federal and state income tax (since I got laid off, not like I am taking the distribution early during my employment), right?

@Basit Siddiqi but you have to take that distribution this year, right?  What if I got laid off and want to take the distribution?  I don't have limit of 100k and still no 10% penalty, only federal and tax income tax?  Thanks.

Thanks @Daniel Toshev

@Daniel Toshev did you have to prove that you have adverse financial consequences due to COVID 19?