All Forum Posts by: Account Closed

The audit trail feature can be turned on and off and can be found in your preferences.

The IRS though is not going to have any problem with you fixing mistakes though. They may have a greater problem though if they see the audit feature being turned on and off. They generally though use the QuickBooks file to prepare a list of source documents they might want to look at. Good record keeping is essential to surviving an audit.

It also has a budget tool that can assist in building projections and also be used as a way of verifying assumptions made at time of purchase. We often look at income and expenses and project possible increases in both in order to compute a return on investment.

I like to compare actual outcomes to what my expectations were. This can be very useful in future purchases as well.

There are several ways to lower the effective tax rate.

The type of income as mentioned above makes a huge difference.
Credits, deductions and exemptions can also greatly reduce the effective tax rate.

Those that pay the highest rates have a great deal of income that is taxed at ordinary income tax rates.

One of the greatest tools that large corporations use today is shifting income to foreign countries and not bringing this income to the US. This is one reason that large corporations might have huge cash reserves, but need to borrow because they don't want to bring the overseas fund to the US were they would be subject to income tax.

Temporary regulation went into effect January 2012. The regs have changed some of what you might think of as repairs. One example in past years you could expense roof work done that say repaired 90% of the roof. In 2012 it is not likely that that work could be expensed as repairs, but would require being capitalized and depreciated over 27.5 years.

Hi Dave,

I'll be back in Washington after the 5th.

I can say as an accountant it is really nice to get QuickBook files from my clients. I can work with spreadsheet though honestly most of them are poorly organized and provide half of the needed information.

It can take a little bit to setup QuickBooks for rentals but once setup it can work well. It especially works well when you have multiple properties rather than just one or two.

Fee free to PM or call me with any questions.

It sounds like the HVAC and basement work are capital improvements and will need to be depreciated as others have said.

I would add though that the temporary regulations that went into effect at the beginning of this year allow for disposal if a cost segregation is done to determine structural component basis. This allows for disposing of structural components that are being replaced while capitalizing the new costs. Also demolition costs can be expensed if this cost segregation is done.

The temporary regulations cover 2013 and 2014 and the final repair/capitalization regs are expected to come out mid year 2013.

A good tax professional may be able to identify some items that can be expensed though in the current year.

If your exit strategy is flipping or perhaps a short term rental (3-5 years) then market value is very important.

For me, I tend to look at long term holds. Market value is important but much less important than the value I can afford to pay and know that I have an adequate ROI and sufficient cash flow. Many non numeric considerations play into that.

Zoning may allow me to convert the current use of the property to a higher and better use.

The local economy may declining and the long term job market may look poor.

A property might be located near wetlands, lakes or other waterways. While this can be an attractive feature it may mean that you can have trouble with septic systems, trouble in remodeling, trouble rebuilding if a property were to burn down.

There are some beautiful homes on the Puget Sound near where I live. Many of these homes are now on lots that would only allow minimal remodeling and in many cases if the homes were destroyed the lot would be unbuildable.

There are many nonnumeric things to consider. They may or may not be factored into the market value, but in my case market value is not the most important value I consider.

Very good reasons to comment.

Based on what you have said, I would drop this agent like a bad potato. It doesn't sound likely that they will properly negotiate on your behalf and it sounds likely that there is some bad feelings here that will interfere in any negotiations.

I don't think you have a legal obligation to this agent for any properties he has shown you unless you have a contractual agreement for him as a buyers agent which would not be a typical arrangement. Ethically you might have some obligation but I have no idea what the agent has really done for you.

Rob Condy, I work out my highest bid based on the numbers and some nonnumerical information that's important to me. I never start out with my highest offer because in so doing I have little or no bargaining room.

In my situation I would know if 6K might still make sense.

When your getting started you may not yet have a good feel for the numbers. You need to know the market value of the property. The value as a rental property that yields a return that makes sense. You also need to know if the property is currently being used at its highest and best use. Some of this is subjective and can depend on your knowledge, experience, resources and creative insight.