All Forum Posts by: Daniel Murphy

Thanks @Michael Plaks, yes, this is for a property that I purchased and put in service in 2022.  
What do you mean enter 3-5 assets per property? 

Before you jump all over me with the "always hire a CPA" stuff, hear me out. 

I'm a financial planner & I've been pretty comfortable with taxes.  In most years, what I have planned & projected with my taxes has ended up being within about 5% of the final numbers when run by my former CPA.  

That being said, I am trying to add a cost seg report this year.  I paid to have the report done, I'm just struggling with how to enter the data into Turbo Tax premier desktop.  

Are there any accountants or CPA's who would do a standalone fee to look over this section for me to give me a second opinion? 

To clarify, I wanted to do this myself so I can have a much deeper understanding of the mechanics of a Cost Seg study and RE taxes specifically.  
Thanks in advance. 

You mean switching your entire portfolio to precious metals?  

I don't see any pro's in that. Other than a (temporary) sense that you've "done something" to stop the bleeding.  Precious metals are wildly volatile & in general, not a good investment. They are an inflation hedge.  

The best quote I've ever heard after 15 years as a financial planner is, "an ounce of gold will buy you a nice suit.  If you hold it for 20 years, it'll buy you a nice suit."  IE - it doesn't appreciate, it just hedges inflation.  

@Gabriel Starr, I wouldn't say that 401k's are bad.  They're a good investment for the masses.  As a RE investor, you have to realize that we're a group that is comfortable thinking outside of the box & taking on more work & risk.  Yes, I believe that long-term RE investments will outperform. But it also comes with a cost of extra work & complexity.  

You mention that the 401k & investment have fees, so does RE.  Property taxes, insurance, repairs, software etc.  We just tend to mentally think of this stuff in a different way as they are not labeled "fees".  As humans, we're taught that "fees" are bad so our brain tends to process anything with the word "fees" differently than we would process "property tax".  

All that being said, if your 401k is mostly in Roth assets, your "cost" to withdraw it may be pretty minimal. You can withdraw your contributions out of a Roth IRA anytime tax free as a return of your basis. The gains are subject to a 10% IRS penalty & taxation. However, if you're talking about a Roth 401k (vs. a Roth IRA), you may not be able to withdraw the full amount of the assets. In a 401k, your technical term is called a "participant". IE, you're just participating in the plan that your employer setup. You only have a certain amount of control & options. Think of, you're riding a bus. You're a passenger. You can't do whatever you want, you have to do what the bus driver says & go where the bus driver drives.

Email your HR department & ask for your "summary plan description".  They are required by law to give this to you annually & it spells out all of the boring details about your plan. This is where it will tell you details about withdrawals, loans etc.  

@Rodney Menendez, we're just wrapping up our first 12 months with our STR in CC. We have a 3/2 in SW cape, (Trafalgar & Santa Barbara) with a pool and no canal access.

I don't think the canal access is a dealbreaker.  We had great success in year one despite having a lot to learn.  We had probably a 70-75% occupancy rate. Year two should be much better.  

I'd be happy to talk more if you ever want.  Reach out with any questions! I can share my contacts with you also.  

Odd question for a public forum but... do you attend a church regularly?  If so, you can try Samaratin ministries, Christian healthshare, Liberty or Medishare.  

This qualifies as healthcare for tax purposes, but it's different.  

We have a family of 6 covered for about $550 / mo.  It's definitely different than traditional insurance. But we love it. We do a lot of natural or "outside of traditional healthcare" options. Chiropractic, naturapathic doctors, IV treatments etc in order to treat chronic illness in the house.  The best part is that you pay all of your bills on your credit card, rack up the rewards then other people pay you back the balance! 

I've used capital one for years.  I don't like big banks, but small banks just don't have as good of service in my expereience.  

We don't even have a capital one branch in my state & I've never had an issue with it.  No fees, money transfers easily & instantly.  

did your sibling pass before, or after Jan 1, 2020?  
If it was before, you fall under the old rules where you have to withdraw the balance of the account over your IRS life expectancy.  

If it was after, you have to withdraw the account out within 10 years.  This makes a big difference.  

You shouldn't be penalized the 10% IRS penalty, just taxed at your marginal tax rate.  

So... If you are required to withdraw the account out within 10 years, it makes a lot more sense to withdraw the funds incrementally to purchase property.  

Here's some easy math / ideas... Take your income (joint if filing jointly), subtract any 401k contributions.  Then subtract your standard deduction $13,850 if single, $27,700 if filing jointly.  This is an estimate of your taxable income.  

Then, google your 2023 tax rates. I'd say as long as you can keep yourself within the 22% tax bracket (or up to 24% potentially) it would not be a bad idea to withdraw the inherited IRA funds to purchase real estate. Take the upper amount of the tax bracket minus your estimated taxable income. The difference is how much you could theoretically withdraw from the IRA this year and still stay in the 22% (or 24%) tax bracket. If you end up above the 24%, it gets tricker as now you are in a "high" tax bracket.

Would you be willing to check your referral page and let me know what it says?  

Click on your picture in the upper right, then "refer a host" and you can see your progress.  If someone used your referral code, you'll see progress there.  
The funky part is that everything worked as you would expect.  

My friend used my referral code, I saw him in the referral page.  Then a progress bar as he created his listing & had his first stay.  Then a "wait while we review" stage, and then suddenly "referral isn't eligible because this person is not eligible to be a host."  

So by all indications, the system is advertised, functioning and has processes in place.  But in my case (and many others), they then suddenly just deny the referral payout with zero proof.  Only words.