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All Forum Posts by: Eric Shadowens

Eric Shadowens has started 6 posts and replied 31 times.

Post: Cost segregation study wanted!

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

@Jerry Fung

Hello Jerry,

Are you working with a tax advisor or preparing a return on your own? Do you have a full-time W2 job not in real estate? Are your properties LTR or STR? Do you meet the REPS for LTR or material participation for STR?

I recommend the residential cost seg calculator through KBKG.com to clients I work with when the depreciable value is less than $600k and there are less than 6 units.

If the depreciable value or units are greater than those amounts you may consider Madison Specs and Yoneh Weiss, but they are always worth a conversation to get better educated when considering a cost seg.

You may already be aware of the potential passive activity limitations, but it is worth mentioning here if not. Consult a tax advisor to make sure the accelerated depreciation eligible in the cost seg will benefit you.

Thanks

Eric

Post: CPA looking to learn more about Real Estate Tax

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

@Gaspare Randazzo

I would provide links, but cannot do so on my phone easily….

Here are four books you should strongly consider reading to gain a better tax understanding…

Every Landlords Tax Guide (it’s a NOLO book and believe Fishman is the author.)

Loopholes of Real Estate (Wheelright is author)

And there are 2 BP books written by Amanda Han who owns her own firm on the west coast.

All 4 of these books are great for new investors wanting to understand the tax side.

You might also consider following the tax forum here in BP. Micheal Plaks and Eamon McElroy (hopefully I have these names correct) are 2 of about 10-12 tax advisors that provide great info.

Post: Recommended reading to maximize tax strategies ???

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

@Basit Siddiqi

Every Landlord’s Tax Deduction Guide. It’s a great book and easy to understand terms. Make sure you purchase the most recent version so that you have more current tax changes.

Post: CARES Act: Property Owners & Paycheck Protection Program

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

One important item to mention is there are additional guidelines to be set by SBA and will be sent to approved lenders.  The CARES Act introduced this loan on March 27th and some lenders I've spoken to expect there to be a delay between that date and the date they'll actually be able to process the loans.  I've been told it is recommended to apply as soon as possible.  You'll likely want to be in contact with your Relationship Manager of the bank you use as some bankers I've spoken to have been inundated with inquiries and are working with established clients first.

The payroll costs for self-employed may have more detail provided in the future guidance.  It appears that the amount would include sole proprietor income or independent contractor compensation not in excess of $100k.  

Post: CARES Act: Property Owners & Paycheck Protection Program

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf

Hopefully this link pasted properly from my IPhone. It is a link to a pdf provided by the US Chamber of Commerce and shows the calculation of loan amount for sole proprietors and self-employed for those applying for the Paycheck Protection loan. See page 3 of 4.

Post: CARES Act: Property Owners & Paycheck Protection Program

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

The loan you are speaking (SBA Section 7(a) Paycheck Protection Loan) of has the following eligibility requirements:

1. Your business must have been operational on February 15, 2020, 

2. You had employees for whom you paid salaries and payroll taxes, or paid independent contractors, and

3. You are substantially impacted by public health restrictions related to COVID19.

If you meet the eligibility you would be allowed a loan up to the lesser of $10 million or your average total monthly payroll costs during the one-year period to the loan being made multiplied by 2.5.  

There is also the SBA 7(b) Emergency Injury Disaster Loan Program.  It may not have as much bells and whistles as the SBA 7(a), but it is definitely something you can consider.  The EIDL loan is disbursed directly from the SBA and no owner personal guarantee is required for loans up to $200k.  

EIDL loan does not have a loan forgiveness component, but does have a subsidy for certain loan payments which I don't see has been defined as of yet if I'm understanding these 2 loans correctly.

Post: Tax Deadline Extended to July 15

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

@Steve Vaughan Awesome to hear you filed.  Also, it might be worth noting though the federal date has been extended,  states are still announcing individually their plans.  I've included a link below with state tax filing guidance that might be helpful.

Interesting note is our county here in Louisville, KY just provided their guidance on local tax and kindly let us know that as of yesterday their was no change to filing nor payment due dates.  It appears they are requiring taxpayers to go through the abatement process in the event returns or payments are not timely.

A really good time to communicate with your tax advisor regarding changes to this tax season.

Stay safe! 

https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/coronavirus-state-filing-relief.pdf

Post: April 15th Tax Filing Deadline Extended

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

A few interesting items to note...

* Please see the update to my original post for corrections from today's release (3/18)

* Quarterly Estimates - Only the 1st quarter estimate was included in the payment relief.  Therefore, you should be ready to timely pay your 2nd quarter estimate which is due June 15th.

* In some cases your tax advisor may generally include your 1st quarter estimate as part of an overpayment on your tax return to save you from writing a separate check.  You should definitely communicate with your tax advisor to make sure you understand how it is getting handled this year.

* Keep in mind there is generally a penalty for late filing and a penalty for late paying.  It's extremely important to make sure your return gets extended by 4/15 if you are unable to file so that you avoid the late filing penalty.

* The state filing link in my original post is still good to follow if you are unsure about state tax filing relief.

* The payment relief covers individual tax liability up to $1 million of their 2019 tax due.

Post: April 15th Tax Filing Deadline Extended

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

@Natalie Kolodij as I said in my personal message to you I apologize for being incorrect.  I certainly wouldn't want to mislead a taxpayer into the wrong advice.  At the time of my original post I believed I was using authoritative material to post good news to users on this forum.  It's apparent that I am not the only one who was incorrect as the article I used has been edited multiple times since its original publish.  You may Google "Treasury Delays April 15th Tax Deadline by 90 Days" by Lisa Davison at Bloomberg which maybe I should've cited in the first place.  It was first released around 1pm today and edited around 3 and 4pm.  

It would've been simple for you to correct me as I told you, but it's really not necessary to call it click bait nonsense.  It reflects poorly on your respect for other posters on this forum and those in our accounting profession.  I've been wrong many times in my life and have learned plenty.  I will take this error and learn as well.  

To me click bait is meant to deceive someone into gaining from them.  If you had really read my original post you would have realized I was not quoting what the AICPA has been discussing the last few weeks.  I actually was getting my info from information released today.

Calling my material click bait may lead someone to think I am a fraud.  I certainly wouldn't want to be accused of being a fraud.  

Also, here is a great definition of click bait.  I encourage you to consider using it in the future.

Clickbait, a form of false advertisement, uses hyperlink text or a thumbnail link that is designed to attract attention and to entice users to follow that link and read, view, or listen to the linked piece of online content, with a defining characteristic of being deceptive, typically sensationalized or misleading.

I believe my post was neither deceptive, sensationalized nor misleading.  It was very incorrect which you have done a great job of correcting.

As I told you personally I truly respect what you and a lot of the other accounting folks on this forum do.  I've been able to increase my knowledge by reading the answers you provide.  I believe there are times though that a few of you attack other posters based on your comments such as the click bait comment when it's really not necessary.

Post: April 15th Tax Filing Deadline Extended

Eric ShadowensPosted
  • Accountant
  • Louisville, KY
  • Posts 32
  • Votes 25

@Courtney Duong The April 15th deadline is generally for individuals and c-corporations.  March 16th was the deadline this year for partnership and s-corporation tax returns which was not automatically extended.  IRS has indicated they would be generous in determining reasonable cause for penalty abatement requests if returns were not filed timely.

Please see this post I made earlier regarding the March 16th date as well as the comment by @EamonnMcElroy regarding small partnerships.

https://www.biggerpockets.com/forums/51/topics/816988-march-16th-filing-deadline-has-passed-late-filing-penalty-info

As always, please consult your tax advisor to make sure your returns are filed properly.