All Forum Posts by: Henry Li

so... both my wife and I have a W2 job. let's say our income is at around the 24% tax bracket. And then my real estate sales "part time"  let's say I made 50k in 2019. Does it mean the 50k commission income has to be taxed our ordinary income tax rate 24%, plus the self employed tax which is about another 15%? If so then that it would be about 40% tax that we have to pay? Sounds a bit too much and would like to get some clarification. thank you in advance. 

so my client's tenant is about to be moved out by an execution. The judgement has about $3900 owe to the landlord. I have 2 questions:

1. per the lease, tenant is responsible for legal fee if the issue is raised by her. for non payment, I think she would be responsible for the legal fee. this is not in the judgement, but can I have debt collector to collect legal fee also? 

2. anyone has any good debt collection company to recommend? I think in Massachusetts is preferred, but as far as I know it doesn't need to be in the same state to do debt collection. 

 I think I need a good one that can track tenant down by ssn , and have a way to collect debt out from her wage or something. 

thanks 

Hi, 

   I had several international buyers who were travel visa holder. They purchased some rental properties here in Mass. I heard that the first three years are tax free. First of all, is this true? Secondly, what about after the three years? Do the investors file tax return? they don't have any other income in the U.S. And they don't even have a social security number. Even if they want to fix a tax return, the problem is how? any insight ? thank you  

@Zachary Bohn   thanks! 

@Weston Couch thank you. I think the biggest issue of the rental properties transfer into LLC(s) is that I have to get consent from my mortgage lenders. And I don't really know if transferring them into LLC actually give me enough benefits. I don't pay much tax from my rental properties because I have mortgage interest deduction, property tax, insurance.. repair ,, depreciation etc etc. and most of my rentals are condo, liability isn't high. i guess not worth the headache for now... but thank you very much for your info.

@Eamonn McElroy  thanks. I'm a part time realtor so my average yearly commission before tax is on the edge of 50k. I'm glad you brought up the point. so what happens if my real estate sale income is less than 50k? 

Does it mean LLC is more flexible/suitable? assuming my state allows brokers to pay real estate agents with their EIN instead of social.

@Zachary Bohn

//but the issue is that it will also require you to take a reasonable salary from the S-Corp 

So, double taxed? 

so, real estate broker is okay to pay their real estate agent under EIN instead of SSN? I think this was my main question. Not sure if my broker knows the answer guess I should ask as well. 

@Zachary Bohn .... that's what I heard .. thanks

I have watched a youtube video that the CPA talked about forming a S corp and dump real estate agent commission into the S corp and pay less tax etc etc. my Question is, for most real estate agents, they are not the owner, they get 1099 with their SSN. How could this be done? How do they convert the commission income to the S corp to separate it from their W2 (if they have a regular job also) ? 

Another question is, what about rental income? if the properties are under my name and I have a mortgage on them, is it possible to have the rental to run under an LLC or S corp? I think my goal is to separate my business/investment income from my W2 income to avoid paying too much tax.

any insight would be appreciated.  

@Basit Siddiqi    I thought about that, as a real estate agent, and I'm preparing to start a small business; I think I should be able to use my home as office. But my accountant told me before that home office is not worth it because the percentage used shouldn't be a lot.... and it is a red flag etc etc...  would you recommend claiming home office?