All Forum Posts by: Ryan McBride

Looking to buy a property that has no gutters installed and as such, there is a lip around the home of brick where water drips down and seeps into the window cavity.

This has generated mold on 2 walls of the home (brick construction) but it has been localized only on 3 windows underneath them. This was confirmed by a home inspector opening walls to check for other areas where it may have spread. total, we're talking 3-4 4x8 sheets of drywall to replace once pulled off and remedied.

The question I have is... ballpark... what am i looking at here for a cost. Mold sucks, and i've never dealt with it before, but this deal may be too good to pass up. Property is in Illinois, so any illinois contractor with experience in this area, your opinion would be valued. I plan on first installing a gutter system to properly drain the property. How much money am I looking at for 1) a mold inspector to tell me the extent of damage, and 2) removal of the mold in areas of question. finishing of the wall after demo and cleaning would be excluded from the cost of course.

This is exactly the formula and method I use to do mine. However, if it's at all possible, that's a few more $$ in my pocket at tax time, and I'm not one to pass up a tax deduction when it's legit.

Hoping that someone here can shine a definitive light on the subject, preferrably someone with tax advice. My accountant is good at keeping records and making my books straight but she's not up to date on the details of tax code.

During the first week of the month, like most landlords, I'm tasked with collecting rent, paying bills and utilities, and as always, looking for more property to acquire.

I have never expensed lunch when i'm out and about running these "errands" but a fellow landlord told me that he was deducting the normal 50% of the cost of meals when tax time rolls around.

For example, my friend leaves his office at 10am, and drives to a property and collects rent from 6 tennants. 11am, he drives to a 2nd property to collect rent from 4 tennants. then it's noon. He stops by McDougals, sits down and has a $7 lunch, keeps the receipt, then drives to a 3rd property and collects his remaining rent.

now we all know the mileage driven is deductible in full for those trips, but what about the lunch cost?

Quick searches tell us that it has to be reasonable, and related to your business in order to claim the tax deduction.

Can someone clarify if it's possible to deduct the lunch as a business expense in the above scenario? Also, what if the errand is simply running to the post office at lunchtime to check your PO box and grabbing lunch on the way. Are these legitimate deductions i've been missing all along?

Thanks,

My partner and I decided to buy a condo to flip in about a 6 months timeframe. He purchased it under his name as his primary residence and we decided (with a binding contract of course) to split all profit 50/50 and to try and split the expenses with the rehab 50/50 as well. Originally the plan was for him to move into the unit after it was fixed up and he would refinance it under a new loan, and refund all my repair costs and then split the profit with me.

Here is the problem:

We decided to right out sell the property once we're done with it instead of refinancing. When we go to the closing table with our buyer, there will be a big fat check issued in his name (somewhere in the ballpark of 50k).

What I want to know is... wont the IRS look at me funny if I suddenly deposit 25k in one day and try to tax me on it as personal income? I have the contract and everything lined up for an agreement between us, but i'm afraid that the money will be taxed because it's not set up as a proper person to person loan.

I agree with Wesley here. If you ask me, this guy is doing you a favor. He's doing legwork hoping to see if he can make a quick wholesale flip, and in the process he might shoot himself in the foot and find you a direct buyer, all without having a contract signed.

I dont think he's trying to do anything sneaky here; he's just covering his bases and limiting his risk like every other REI in the world today.

Let him advertise for you. if the potential seller sees what he's trying to do, they might just come to you directly and get a discount.

I'm a real estate investor (first timer about to sell my first flip). I bought a condo back in May 2006 for $149k, rehab costs are approximately $25k, sales price $230k, RE Agent's commission 4.5%.

My question comes as to what I can deduct to reduce my capital gains tax exposure. I know that all repairs and improvements can be included in my cost basis, but what about expenses relating to the rehab.

for example, My partner and I were the ones doing the rehab. No contractors, no outside work being performed other than what Me and My partner did. Can we deduct meals to reduce capital gains exposure? I've kept receipts and a log of all meals we've taken and they're all during the lunch hour when we would order in and work while eating.

2nd part of the question is mileage. if i'm the owner of the property (my partner doesnt have his name on the deed or the mortgage) and we use his vehicle for going to and from the home supply store to pick up material and run errands, is his mileage deductible in some way?

Is there a list of what's considered acceptable to include in your cost basis and sales basis when trying to figure your capital gains tax?

Additionally, can someone please explain to me or point me to a table that shows how the tax is affected if you hold a property for less than 12 months vs more than 12 months what your capital gains tax should be?