All Forum Posts by: James Parrish

Hi Laura,

Using real estate to offset non-passive income can be more difficult than you have been led to believe. Generally, more than half of all hours worked in a year must be dedicated to real estate activities to qualify as a REP, which allows you to use real estate losses towards other income (your other job I'm assuming). Another way is if you used this property for personal purposes for a certain amount of days.

As for reputable CPAs, there are many on this forum who know the ins and outs a real estate. Browse through the threads and contact those you feel are knowledgeable 

There are plenty of reputable tax professionals on this forum who will service your needs remotely. Physical location is not as important as one might think. Browse through the threads and contact anyone you think is knowledgeable!

Cheers

A cost segregation study increases your depreciation expense which reduces your net income, that is where the tax savings come from. It's not a refundable tax credit that will generate a check from the treasury. An NOL created by a cost segregation study, however, can be carried forward and used in the future in the same manner. In any event, it's best to consult your CPA due to specific rules and limitations. Hope this helps!

@Jonathan Mooney Typically your property can be deemed "placed in service" when it's ready for a specific use. Whether or not its rented out or "used" during the tax year does not matter. I just DM'd you, I'd be happy to explain it in more detail if you'd like.

Cheers

@Michael Greer

750 hours of active participation in your property is the threshold to qualify as a REP. Every hour does not have to be documented notes, meetings, appointments, and schedules will suffice as proof. Hope this helps

@Michael Plaks

Some accountants use the 80/20 rule because it's quick and will create more deductions for their client. I just ran into a situation where the land value was assessed at 76%. Always best to do your due diligence.

@Kyler J Sloan

Like others have said,  these renovation costs can be expensed or charged to the capital account depending on their nature. If they're capitalized, they will be depreciated over 27.5 or 39 years, if you use the straight-line method.... This stuff can get pretty tricky I suggest seeking advice from a professional.

In terms of Passive/Active losses, these losses can be made active if you're a licensed realtor, or you performed more than 750 hours of work on your rental property(s), which include construction, renovation, and other managing tasks. Just an FYI

@Chris McCormack is correct buy and hold offers more opportunities. If your looking for tax benefits, try to become a minority owner of the property instead of taking compensation.

@Ernie G.

Just sent you a DM! Let's connect

Hi Phillip,

Unfortunately, as your portfolio expands so does the amount of tax work required to be in compliance with the IRS. Our services always create an ROI for our clients, when we onboard new ones we always explain the path to growth and always try to find a middle ground. Feel free to reach out!