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All Forum Posts by: Craig Parsons

Craig Parsons has started 16 posts and replied 138 times.

Post: Yo! Out of State Investors! Stop doing this. We are laughing at you.

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @James Wise:
Quote from @Eric James:
Quote from @Melanie P.:
Quote from @Eric James:
Quote from @Melanie P.:
Quote from @Eric James:
Quote from @Nicholas L.:

@James Wise

I think part of the issue is that, per 2016 Brandon Turner, every property cash flows $250 a month forever, and so there's no such thing as a $5K turnover


 I've had rental properties for 14 years and never even had a $1000 turnover


 You've got rentals going 14 years that you've never replaced the flooring? Never painted? No plumbing issues?

Yeah, sure.


 Those don't cost thousands of dollars.


 You said you'd never had a $1,000 turnover before. You're quoted above.


 Yes, I've replaced flooring, painted, and had plumbing repairs. Never been above $1000 for a turnover. I don't understand why this seems so strange. I get having a rare tenant who trashes a place, but I haven't had one to date. What seems strange to me is that you think it's common. 

 You can't get a unit painted for under $1k. You haven't repainted an entire unit in 14 years?


 This is exactly why people do not trust property managers. Obviously it depends on size but I have repainted plenty of units for around $1000.00 or less in California to boot. Obviously these are nothing fancy but they are also not slums. The fact that you state something cant be done shows your lack of effort to spend your customers wisely!   But I bet that cool Smurf Blue body paint you have costs plenty.

Post: Owner Finance Purchase

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Lawrence Adair:

Hello, I’m going to be purchasing my first owner finance deal this year in San Antonio. Can anyone offer some insight or good practices to do when purchasing. Also I’m having trouble of thinking about the highest and best use for the property, as it will become an investment property. 

 Without knowing what you know this is hard to answer.  For the owner financing.  Make sure you use a company to process the payments this usually costs about 5 bucks a month in my area.  Obviously get your terms spelled out in the contract. Make sure your seller is an additional insured on the property.  Also come up with exit contingencies, if you have a balloon due IN X years and for some reason you can't pay the balloon off at the proper time. For example I once had a loan due and the refinancing took longer than the bank expected and luckily the seller agreed to extend one month. If the seller wanted to be a hard case things could of gone bad for me.  So maybe cover that In your agreement as well.   I'm sure there are many other things that will come up from others as well.

Post: Killer deal but how to structure?

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Derek Nemec:
Quote from @Robert Rixer:

Have you heard of the installment method of income tax accounting.?


 Yes Derek yo are on the right track for sure I have bought multiple properties in the past using this method as a reason the owner should owner finance instead of bank financing.  Go get some!

https://www.irs.gov/publications/p537#en_US_2023_publink1000...

Post: Killer deal but how to structure?

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Robert Rixer:

If the title transfers, that's a sale and will cause a tax event. Unless you're talking about taking over title in 2025 under some sort of master lease agreement, she will be hit with capital gains tax regardless of what seller finance terms you come up with.

I am not sure that is true if the seller uses the installment method as defined in the IRS publication 

https://www.irs.gov/publications/p537#en_US_2023_publink1000...

The way that I understand it is if a seller uses the installment method only the portion paid of the capitol gains paid in any year are taxable as capital gains and can therefore be spread out over time.

Post: Tax deduction when using Reward Points for travel

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Jay Hinrichs:
Quote from @Craig Parsons:
Quote from @Russell Brazil:
Quote from @Craig Parsons:
Quote from @Michael Plaks:
Quote from @Craig Parsons:

 Obviously 5 weeks of play time can be deemed personal use. But if like in my example I have appointments on Monday and Friday of the same week. I do not see how any auditor could say that if I spent  Tuesday Wednesday and Thursday sightseeing ,on my own dime of course, that the trip was Primarily personal.   By  your logic if I spent the 3 days in my hotel room staring at the walls it is personal. 

Don't twist it into "my logic."  I'm talking about the IRS rules. Logic of any kind has a very small role in making the IRS rules. 

You also twisted the example from the Regulations. It's not about duration of 5 weeks, it is about the ratio of 1:5 - as in 1 business week followed by 5 personal weeks. Same ratio as in the OP example: "the business aspects are completed in a single day and I usually stay for a week."

In my response to the OP, I said: "There're ways to plan your trip around this requirement, but not how you do it."  Your example of business on Monday and Friday with personal days in between is a good example of a legitimate attempt to structure. 

Does it solve the problem? Maybe, and maybe not. It depends on the specific situation and on why you scheduled your appointments this way. If you had no other option to schedule, due for example to these people's availability - then I'd say yes. But if you simply chose to schedule it this way - then I'd say no. Why no? Because if we take your idea to its logical (see what I did here?) extension, I could schedule one business appointment on the 1st of the month and another on the 31st and then spend the rest of the month vacationing. Would it be "primarily for business"? 

Finally, I'm not interested in continuing our back-and-forth. I shared enough information for anybody to draw their own conclusions. You are entitled to yours. The IRS may disagree, and it's your problem at that point.


 Unfortunately I don't think we are understanding each other.  Yes you did say there was a way to schedule so that it can be deducted.  I wish you would of elaborated on that as telling someone how to do something is much more valuable then telling them they cant do something.  And all I am saying is that if I travel to my rental for a necessary and legitimate business reason and I stay a few extra days or even a month  the flight or travel expense to and from the location  IS deductible.  I would also mention to the OP that the IRS does state that use of airline miles is NOT deductible.  I also found this on IRS.gov. it seems fairly clear you sir are wrong!  


 Staying an extra few days is only allowed when its a weekend. If you're doing business on Friday, and your personal stuff on Saturday/Sunday the IRS allows the flight at the end of the weekend or Monday back. 


 Can you explain how you say this based on the IRS publication above?  

Trip Primarily for Business
You can deduct all of your travel expenses if your trip was
entirely business related. If your trip was primarily for busi-
ness and, while at your business destination, you exten-
ded your stay for a vacation, made a personal side trip, or
had other personal activities, you can deduct only your
business-related travel expenses. These expenses in-
clude the travel costs of getting to and from your business
destination and any business-related expenses at your
business destination

please please tell me how I am wrong.  

sorry guys it gets my hackles up when people only tell me what I can't do instead of what I can do.


well you have whats written and then you have reality when your audited.. Since I have extensive business travel for decades .. I got audited for 3 years. all of the above was thrown out.
One example I had a business trip to London then to Tel Aviv.  Tel Aviv I had some personal things as well a Bar mitzvah  But London was 100% business as I have a client outside London.. We met at harrods and I bought him lunch.. Poor choice i guess IRS agent said my wife must have been shopping there.. Also in Tel Aviv I have a business contact went to their office for a meeting so I just wrote off one day of the trip again disallowed.. so to me its what is written and what a IRS agent will allow.. anyone can write this stuff off its when  you get audited that things go wonky.

 I will agree with what you are saying 100% and it kind of agrees with my statement saying there is leeway.   Personally I have fought the IRS 3 times and won 2 of the 3 times. Including being able to increase my tax refund once when I was audited. While I do believe in pressing the envelope. I will also leave a few deductions off my taxes just in case of an audit. I for instance never claim meals, I figure I'm gonna eat anyhow, and the paltry amount is not worth the hassle.

Post: Tax deduction when using Reward Points for travel

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Russell Brazil:
Quote from @Craig Parsons:
Quote from @Michael Plaks:
Quote from @Craig Parsons:

 Obviously 5 weeks of play time can be deemed personal use. But if like in my example I have appointments on Monday and Friday of the same week. I do not see how any auditor could say that if I spent  Tuesday Wednesday and Thursday sightseeing ,on my own dime of course, that the trip was Primarily personal.   By  your logic if I spent the 3 days in my hotel room staring at the walls it is personal. 

Don't twist it into "my logic."  I'm talking about the IRS rules. Logic of any kind has a very small role in making the IRS rules. 

You also twisted the example from the Regulations. It's not about duration of 5 weeks, it is about the ratio of 1:5 - as in 1 business week followed by 5 personal weeks. Same ratio as in the OP example: "the business aspects are completed in a single day and I usually stay for a week."

In my response to the OP, I said: "There're ways to plan your trip around this requirement, but not how you do it."  Your example of business on Monday and Friday with personal days in between is a good example of a legitimate attempt to structure. 

Does it solve the problem? Maybe, and maybe not. It depends on the specific situation and on why you scheduled your appointments this way. If you had no other option to schedule, due for example to these people's availability - then I'd say yes. But if you simply chose to schedule it this way - then I'd say no. Why no? Because if we take your idea to its logical (see what I did here?) extension, I could schedule one business appointment on the 1st of the month and another on the 31st and then spend the rest of the month vacationing. Would it be "primarily for business"? 

Finally, I'm not interested in continuing our back-and-forth. I shared enough information for anybody to draw their own conclusions. You are entitled to yours. The IRS may disagree, and it's your problem at that point.


 Unfortunately I don't think we are understanding each other.  Yes you did say there was a way to schedule so that it can be deducted.  I wish you would of elaborated on that as telling someone how to do something is much more valuable then telling them they cant do something.  And all I am saying is that if I travel to my rental for a necessary and legitimate business reason and I stay a few extra days or even a month  the flight or travel expense to and from the location  IS deductible.  I would also mention to the OP that the IRS does state that use of airline miles is NOT deductible.  I also found this on IRS.gov. it seems fairly clear you sir are wrong!  


 Staying an extra few days is only allowed when its a weekend. If you're doing business on Friday, and your personal stuff on Saturday/Sunday the IRS allows the flight at the end of the weekend or Monday back. 


 Can you explain how you say this based on the IRS publication above?  

Trip Primarily for Business
You can deduct all of your travel expenses if your trip was
entirely business related. If your trip was primarily for busi-
ness and, while at your business destination, you exten-
ded your stay for a vacation, made a personal side trip, or
had other personal activities, you can deduct only your
business-related travel expenses. These expenses in-
clude the travel costs of getting to and from your business
destination and any business-related expenses at your
business destination

please please tell me how I am wrong.  

sorry guys it gets my hackles up when people only tell me what I can't do instead of what I can do.

Post: Tax deduction when using Reward Points for travel

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Michael Plaks:
Quote from @Craig Parsons:

 Obviously 5 weeks of play time can be deemed personal use. But if like in my example I have appointments on Monday and Friday of the same week. I do not see how any auditor could say that if I spent  Tuesday Wednesday and Thursday sightseeing ,on my own dime of course, that the trip was Primarily personal.   By  your logic if I spent the 3 days in my hotel room staring at the walls it is personal. 

Don't twist it into "my logic."  I'm talking about the IRS rules. Logic of any kind has a very small role in making the IRS rules. 

You also twisted the example from the Regulations. It's not about duration of 5 weeks, it is about the ratio of 1:5 - as in 1 business week followed by 5 personal weeks. Same ratio as in the OP example: "the business aspects are completed in a single day and I usually stay for a week."

In my response to the OP, I said: "There're ways to plan your trip around this requirement, but not how you do it."  Your example of business on Monday and Friday with personal days in between is a good example of a legitimate attempt to structure. 

Does it solve the problem? Maybe, and maybe not. It depends on the specific situation and on why you scheduled your appointments this way. If you had no other option to schedule, due for example to these people's availability - then I'd say yes. But if you simply chose to schedule it this way - then I'd say no. Why no? Because if we take your idea to its logical (see what I did here?) extension, I could schedule one business appointment on the 1st of the month and another on the 31st and then spend the rest of the month vacationing. Would it be "primarily for business"? 

Finally, I'm not interested in continuing our back-and-forth. I shared enough information for anybody to draw their own conclusions. You are entitled to yours. The IRS may disagree, and it's your problem at that point.


 Unfortunately I don't think we are understanding each other.  Yes you did say there was a way to schedule so that it can be deducted.  I wish you would of elaborated on that as telling someone how to do something is much more valuable then telling them they cant do something.  And all I am saying is that if I travel to my rental for a necessary and legitimate business reason and I stay a few extra days or even a month  the flight or travel expense to and from the location  IS deductible.  I would also mention to the OP that the IRS does state that use of airline miles is NOT deductible.  I also found this on IRS.gov. it seems fairly clear you sir are wrong!  

Post: Tax deduction when using Reward Points for travel

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Michael Plaks:
Quote from @Craig Parsons:

Some leeway but not as much as you would like. From the IRS Regulations 1.162-2 which is the actual law:
-----
(b)(1) If a taxpayer travels to a destination and while at such destination engages in both business and personal activities, traveling expenses to and from such destination are deductible only if the trip is related primarily to the taxpayer's trade or business. If the trip is primarily personal in nature, the traveling expenses to and from the destination are not deductible even though the taxpayer engages in business activities while at such destination. However, expenses while at the destination which are properly allocable to the taxpayer's trade or business are deductible even though the traveling expenses to and from the destination are not deductible.

(2) Whether a trip is related primarily to the taxpayer's trade or business or is primarily personal in nature depends on the facts and circumstances in each case. The amount of time during the period of the trip which is spent on personal activity compared to the amount of time spent on activities directly relating to the taxpayer's trade or business is an important factor in determining whether the trip is primarily personal. If, for example, a taxpayer spends one week while at a destination on activities which are directly related to his trade or business and subsequently spends an additional five weeks for vacation or other personal activities, the trip will be considered primarily personal in nature in the absence of a clear showing to the contrary.


 Obviously 5 weeks of play time can be deemed personal use. But if like in my example I have appointments on Monday and Friday of the same week. I do not see how any auditor could say that if I spent  Tuesday Wednesday and Thursday sightseeing ,on my own dime of course, that the trip was Primarily personal.   By  your logic if I spent the 3 days in my hotel room staring at the walls it is personal. 

Post: Tax deduction when using Reward Points for travel

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71
Quote from @Michael Plaks:
Quote from @Craig Parsons:

I'm not a tax professional nor do I play one on TV or did I sleep in a Holiday inn Express. But seems to me if you had a meeting on Monday and then had to stay until Friday for another dreaded meeting that you could deduct all the airfare the fact that you happen to visit family during the week should be irrelevant.  Obviously you need to document your reasons for each trip. 

Maybe it should be irrelevant but it isn't. Please see the direct quote from the IRS in my earlier comment and read the source publication for more context.


 I think the word primarily is definitely one of those  words that leaves a lot of leeway. If I go to my property for a legitimate reason  then its primarily business.  If my mother lives next door and I say hi to her then the IRS can kiss my behind and I will gladly see them in court. Furthermore if my accountant wont allow the deduction I will find another one.  I will say that I do agree that if you think you should be able to deduct your spent airline miles then you should also pay taxes on them like any other income. I would rather just not try and deduct the miles. To  my brain that is way more abuse of the law than visiting a relative when I am in town for a legitimate business reason.   I have a silly question for you. Do you think that spending any money simply because its "Tax Deductable" is a good reason?

Post: Tax deduction when using Reward Points for travel

Craig ParsonsPosted
  • Contractor
  • Orofino ID, Hollister CA
  • Posts 139
  • Votes 71

I'm not a tax professional nor do I play one on TV or did I sleep in a Holiday inn Express. But seems to me if you had a meeting on Monday and then had to stay until Friday for another dreaded meeting that you could deduct all the airfare the fact that you happen to visit family during the week should be irrelevant.  Obviously you need to document your reasons for each trip.