All Forum Posts by: Buddy Holmes

I am adding a fence to a rental property which is on a pond.  It is presently rented to an adult couple, but we want to open it up to families with children.  1) Somewhere I read that for Rental property "improvements" that are under $2500 they can be expensed or written off in the year of payment.  I can not find such a rule in the IRS publication.

Also, @Amanda Han, in her informative post on the new tax law seemed to indicate that such purchases after September 27, 2017, could be now fully written off.  I assume in the 2017 tax return for such end year expenses.

Can anyone add to or direct me to info on either of these?

Thanks.

Cheers,

Buddy

Thanks @Troy Gandee

I think it was the last (Grant?) Cardon podcast, but he had a story about a competitive offer.

In his case he did a video of himself explaining who he is and why he wants to buy the property and what he plans to do for it.

He also added that he was going to catch a red-eye coast to coast flight to mee with the seller the next day.

This was a big property, so I wouldn't add the red-eye part ;>))

Cheers,

Buddy

Just wondering what the law is and how folks generally do deposits.

Cheers,

Buddy

@Mia Trasolini, my grandson in San Diego, @Ryan J. Shope, has been on your same mission for a while now.  Perhaps he can give you some first hand experience.

Cheers,

Buddy

@Ryan Detig,

I did not know about the closed account ability of Mint.

Thanks, that is a nice feature.

Cheers,

Buddy

@Ryan Detig,

As I have thought about your idea of using separate MINT accounts for each rental...

I don't think that will work, unless you totally separate each rental into a totally different bank, different credit card as so forth.  Mint pulls all back accounts in any given bank so the more practical solution of different bank accounts in one bank muddies the water.  Mint can be trained to tag a specific account to a specific rental so with a little double checking on tags each week or so I think MINT can still separate out rental accounts fairly easy with a small amount of double checking.

Cheers,

Buddy

Looking for opinions of the tax risk of re-financing a mortgage on a rental property.

I have read something about the IRS disallowing interest expense of such refinancing.

Cheers,

Buddy 

@Tom R., That sounds correct but where do you claim those expenses on your tax return?  Schedule C seems like the correct place, but...

Using Schedule C seems to be a flag for the IRS auditors (I am in one now). Seems they expect to see some income at some point against those expenses. So if you are doing flips then you have income and all is cool. If your are doing the BRRR or BARRR per @Brandon Hall, then  those get caught up in capitol expense and come off the Basis of a property reported on Schedule E.   My EA for my Audit says unless expenses for looking at an investment turn into an actual investment, the IRS does not consider them an expense.   I don't think that sounds reasonable but still looking at where/how they can be expenses on a tax return.

cheers,

Buddy 

I agree with @Ryan Detig, and @Richard Beatty,  I use Mint for all my rentals and personal accounts as well.

Do get a separate bank account for each property and then Mint can automatically  pull all the transactions and payments (if your local bank has online banking and bill pay).

Have your tenant make direct deposits into that rental account.

I do like Ryan's idea of a separate mint account for each rental though; I had not thought about that! With that set up you might even get separate Credit cards for each rental and tie CC, Bank and Rent Deposit, Mortgage, HOA etc together by a rental X mint account.

This would reduce any weekly account tagging in mint and produce a separate Mint produced Spread Sheet for Tax CPA or Turbo Tax.  Mint looks up Zillow estimated home value for the property so this gives you some idea of Appreciation as well as principal pay down from the Mortgage company.  BTW mint is free and easy to set up. I have Quick Books and will have to pay someone to set it up because it is anything but simple to do so!

Good discussion!

Cheers,

Buddy