All Forum Posts by: Dominick Austria

I wouldn't be worried about the LLC for the reasons mentioned above. If this is a secondary home and you are using it as a short term rental does this mean you are using the property personally through the year? Depending on the days you rent and you use the property personally it could have a negative effect on it. There's special allocations for the deductions that need to happen.

@Bill Y. you'll most likely want to form an LLC and be treated as a partnership. You might have issues with funding though. I'm not quite sure on that end. You could purchase it in both of your names without an LLC and you would each report 50% of the income/expenses on your returns. The foreign investor will need to apply for an ITIN and will need to file a US tax return. You will need to find a Certified Acceptance Agent to help with the ITIN.

Sorry for sounding brash. The home office deduction is still alllowable. It’s just not allowable for W-2 employees. If you are still running a business out of your home you should be able to take the deduction. $140k is a big number. Are you a sole proprietor for this business or set up like an S Corp? There might be potential to save tax there. Are you maximizing the new QBI 20% deduction? Could you move things around to get that to be bigger? You should talk to your CPA or tax advisor about things you might not already be doing.

@Ray S. Stocks are considered capital assets. So losses from stock trades are capital losses. If you have $100,000 of capital gain on the property, and $100,000 short term capital loss from the stock, these will offset each other. If you have $103,000 of short term loss, then you would have a $3,000 deduction against all of your other income. In short, yes you can do what you are planning.

@Derek Smith simply put you can’t do this. You also didn’t lose any benefit. It actually sounds like you gained since you can’t itemize anymore.

@Jay C. yes these are fine. You are bringing together buyers and sellers and negotiating contracts. 

@David McCracken I don't know your numbers and your situation so I can't give you a number. However, I believe the rate is up to 6% now. You calculate it quarterly.

@Ray S. If the property is a rental or investment property, then you probably can. Capital gains can only be offset with capital losses. If the property is a primary, then you might qualify for the personal residence exclusion. If the property is a flip then you won't be able to offset the gain with losses since it is not a capital asset. Without capital gains, you're entitled to deduct $3,000 a year indefinitely for capital losses.

@David McCracken you could have underpayment penalties if you don’t make estimated tax payments. Not sure what that’d be but either you’re going to pay your CPA or the IRS. And if you don’t pay your entire tax by 4/15 there’s even more penalties and interest. Some clients believe they can make more money than what the penalties are. It’s really up to your risk threshold. 

@Jay C. I don’t think this would qualify. Marketing solely for a real estate company won’t make it as facilitating real property. The IRS has held that mortgage brokers are not real estate professionals because they are in the financial business. However, they deal with real estate consumers. I think the same principle applies here.