All Forum Posts by: Eddie L.

@Peter Davis

Can I get in on the newsletter as well? Thanks

I don't know why but I just imagined your insurance policy premiums going up due to higher risks of haunting haha

 No problem. There are other threads where CPAs would answer questions as well. Definitely check those out

Maybe?

https://www.medicaidplanningas...

Another way to protect one’s home from MERP is via the sibling exemption or the child caregiver exception. These exceptions allow ownership of the home to be transferred by a living Medicaid beneficiary without violating Medicaid’s look back rule and causing Medicaid ineligibility. The sibling exemption allows the transfer of a Medicaid applicant’s home to a sibling. The brother or sister must have equity interest in the home and lived there for a minimum of one year immediately preceding institutionalization (i.e., nursing home care) of the Medicaid applicant. The child caregiver exception allows a Medicaid applicant to transfer their home to their healthy adult child. To fulfill the requirements of this exception, the child must have lived in their parent’s home for at least two years prior to the Medicaid applicant’s institutionalization. Furthermore, the child must have provided a level of care during this timeframe that prevented the aging parent from requiring nursing home care.

Maybe look at it from the legal standpoint, first? For example, if this is a LLC how was the operating agreement drafted? Were there provisions on what course of actions can be taken if one member does not perform? Or if one partner wants out are there any repercussions?

*Not a CPA*

I don't follow the segregation you noted in the example above but to make it simpler if 60% of the building was depreciated all the time and now you converted the 40% of the house from primary residence to business use then I believe you just start depreciating the 40% of the house at the time of conversion which is Nov 2021. The basis of conversion as noted in publication below would be the lesser of cost plus other adjustments or the FMV on Nov 2021. I would just track it as House 1 (Placed in service for business use on Mar 2017?) and House 2 (Placed in service for business use on Nov 2021) basically.

https://www.irs.gov/pub/irs-pd...
Page 12
Property changed from personal use. If you held property for personal use and later use it in your business or
income-producing activity, your depreciable basis is the
lesser of the following.
1. The fair market value (FMV) of the property on the
date of the change in use.
2. Your original cost or other basis adjusted as follows.
a. Increased by the cost of any permanent improvements or additions and other costs that must be
added to basis.
b. Decreased by any deductions you claimed for
casualty and theft losses and other items that reduced your basis.

Example. Several years ago, Nia paid $160,000 to
have her home built on a lot that cost her $25,000. Before
changing the property to rental use last year, she paid
$20,000 for permanent improvements to the house and
claimed a $2,000 casualty loss deduction for damage to
the house. Land is not depreciable, so she includes only
the cost of the house when figuring the basis for depreciation.
Nia's adjusted basis in the house when she changed its
use was $178,000 ($160,000 + $20,000 − $2,000). On the
same date, her property had an FMV of $180,000, of
which $15,000 was for the land and $165,000 was for the
house. The basis for depreciation on the house is the
FMV on the date of change ($165,000) because it is less
than her adjusted basis ($178,000).

*Not a CPA*

Depending on circumstances, gain of up to $250,000/$500,000 can be excluded under IRC §121. Was it ever used as a rental property? Did she own and use it for at least two out of the past five years? Roughly how much gain are we talking about? 

Reference

Internal Revenue Service Publication 523 - Selling Your Home

https://www.irs.gov/pub/irs-pd...

*Not a CPA*

Try posting to below thread for definitely a more accurate answer from CPA. Purely a guess from me. The cost basis and fair market value ("FMV") of the securities can change the outcome of this, but conceptually yes to your question being that the transfer of securities from Roth IRA to a Traditional IRA would be considered deductible as a new fund contribution. My logic is that they would treat it as if you sold the securities you're transferring then contributed the cash in and purchased the same securities. Does the brokerage even allow transfer of the securities directly from Roth IRA to the Traditional IRA with a carryover of basis? Assuming you made no IRA contributions this year and your Roth IRA securities have a FMV of $6,000. When you rollover I assume the brokerage will treat it as if there was a Roth withdrawal of prior contributions for $6,000 and a distribution of $6,000 to the Traditional IRA i.e. deductible.

https://www.biggerpockets.com/...

Can't seem to attach files here... After inputting below formulas just drag Row14=Payment Period/Principal/Interest/Total/Net Balance down to Row 373 for 360 Payment Periods

Monthly payment of $2,147.29=B3*((E3/12)*(1+E3/12)^B5)/(((1+E3/12)^B5)-1)

Payment Period of 1 =A13+1

Principal of $480.62=$B$7-C14

Interest of $1,666.67=E13*$E$3/12

Total of $2,147.29=sum(B14:C14)
Net Balance of $399,519.38=E13-B14

Can you elaborate? Withdrawals of Roth IRA contributions are tax free and contributions to Traditional IRA are tax deductible with some exceptions of course. You sold some securities in your Roth IRA account and withdrew not in excess of your life to date Roth IRA contributions and then contributed that into a Traditional IRA account? That would sound deductible like new funds transferred in.