All Forum Posts by: James Defazio

I’m just trying to get an idea if it would be in my best interest to do a 1031 exchange, or if it’s very little in capital gains, I will keep the cash on hand and wait for the right deal to come along. Thanks for the help everyone. 

Hey Natalie I’m asking on here because I have not secured a tax professional yet but I’m planning to. I forgot to mention the purchase price whoops. 127,500 in 2015. We put approximately 7,000 in repairs and improvements over the years...possibly slightly more. Over the last 4 years I will have to check, but I believe around 4K depreciation a year. 

We are going to use a tax professional this year for the first time and need some guidance. We bought a duplex in Spokane Washington in 2015 as our primary residence. We lived there for 10 months and then moved to Ohio to be close to family and new career opportunities (starting full time in real estate rentals). Now we are selling that property as I can make a better return on the money buying and managing it myself rather than paying a property manager. We are selling the property for 230,000 but we are paying $13,800 on closing fees and another $10,000 or so on inspection repairs. I understand the 2 year out of 5 rule, but I’m not sure if I would qualify for any of the special exemptions. There was also a mortgage on the property that was paid off for 95k. Any help would be appreciated. I think it’s too late for a 1031 exchange as I believe the money is in the mail for me. Any suggestions? Thanks! 

Can’t seem to find much information on this but my family and I have qualified for Medicaid for like the past 5 years and we are full time real estate investors with no w2 income. The income eligibility allows us to use our AGI instead of our gross income and so depreciation, expenses, utilities, maintenance ect is all taken off our income and so obviously our taxed income is low enough that we qualify. Could anyone give me pros and cons on this? Most of the posts on health insurance seems that people purchase private health insurance...is there a reason to do that rather than Medicaid? I just assumed that free health care was better for cash flow than paying for it but would like to get some advice from others. We’re in the state of Ohio thanks! 

looks like I’m not gonna qualify for EIC as I am showing 14k investment income after all deductions and depreciation etc. I can’t be over 3400 apparently to qualify. I am right at about 21k for self employment income so preliminary and estimates work out to me owing about 3100 in taxes. Maybe I should just hire you Josh :) 

josh, gotcha thanks for that clarification. Also, I sent you a private message on here just in case you haven’t checked it. Would love to get together with you anytime. 

thanks for all the info guys. Josh- you mentioned I should be able to qualify for the earned income credit as my Airbnb income will qualify as self employment income but to qualify for this I can’t show more than 3400 in investment income. 2 of my properties are paid for with no mortgage and I should have a decent amount of depreciation, taxes, expenses etc to offset a lot of the income but from what I read if it does not surpass what we’d receive from the standard deduction then we just take the standard deduction. My 2 properties with no mortgage make 24,000 a year before any deductions, expenses, depreciation etc...so I’m not sure I will be able to have enough deductions to offset the rental income if I itemized to surpass the standard deduction...but I would think I will need to show more than the allowed investment income to qualify for this tax credit? Thanks you guys. Just trying to get my mind prepared for taxes for next month. 

no I was not including any depreciation forgot about that write off. That’s great thanks Josh! 

Josh will standard deduction this year be 25k? Or will that take effect new year when trumps new tax plan goes into effect? It looks like it might be more like 12 in which case it wouldn’t wipe out most of my income? 

 Josh thank you so much for your help and advice. We are planning to buy another rental this coming year and are getting to the point that we are likely to hire a cpa for our business. I see you are from Willard which is not far away, we will keep in touch as I may be coming in to see you soon! Merry Christmas to everyone!