All Forum Posts by: Jason Hill

Hi all...looking for some general guidance here if I may...

I purchased a home in 2001, lived in it for 2 years til ‘03, and converted to rental. Standard 30yr mortgage.

I never even knew to deduct depreciation until ~2014 when I finally began to expand into more real investment oops (have a total of 4 rentals now). I went 11 years without claiming the depreciation on taxes for that property. Fast forward to Nov 2019, I sold that property and bought another (nicer) property at auction 2 days later.

When I closed in December, the title agent mentioned, if you lived in it, you “shouldn’t” owe capital gains. Also, I believe my “like-kind” purchase shortly after the sale of the property should also (or alternatively) allow me to avoid capital gains. Thoughts?

Another nuance is, back to limited depreciation claim), as I’m using software (credit karma) for taxes, as I’ve attempted to navigate through, in question form I was asked to report “allowable depreciation”. I only claimed it to offset income for a few years. If I DO in fact owe capital gains, MUST I report total “allowable” depreciation or just what I claimed on taxes over last few years?

Sorry for rambling...Ive looked around for similar circumstances but haven’t found anything.

Thanks so much even if general advice (not to be construed as tax advice).

Thanks,

Jason

Prayers answered! He just received his disability approval letter!

All good now 👍

Yeah that’s the biggest concern as I’ve begun to discuss with my wife. While we can afford it, it would definitely compromise being able to act on a true investment opportunity that may develop. There’s a risk that our cash could be tied up indefinitely. 

Thanks for taking the time to respond.

Ok so here’s the deal...

A high school friend of mine down on his luck (stroke victim, divorce, health issues, etc) is nearing achievement of obtaining disability due to health issues. He owes 10k on a land contract for his ~$70k home, is nearing delinquency and is desperate for help. He has sold off nearly all of his belongings of any value and is at the end of his rope. He’s offering a $10k price tag on the home, suggests that we would own the home, and once he gets his disability, would buy back the house for $13,500. Then if he is unable to repay (undefined term) the house is ours. Certainly I want to help him out but I don’t want to get bit either.

Now I’ve not seen his current contract yet, as I don’t want to give him a false hope by asking questions. I’m hoping to get some advice on this matter so that I can avoid blindness to potential risks and to be able to ask the proper questions (of him and the current note holder).

Thanks in advance for any advice.

Thanks so much.

Never mind...I looked more closely at things and learned (officially and despite already provided advice) that it should be included in depreciation.

Thanks anyway!

So, after having read many nasty reviews about Turbo Tax for 2014 and while having positive reviews about TaxAct.com, I've decided to use Tax Act.

I noticed when applying depreciation info, there's also an option to amortize over a differing term than the 27.5 depreciation term.  Should I apply all expenses into the amortization term or apply all expenses (again, all expenses associated with readying the property for renting it out)?

My case is, I purchased this in early November and renovated through 11/30 and made available 12/1 so the depreciation is quite low....just looking to maximize return.

Any advice is greatly appreciated!

Thanks, Jason

@John Horner 

Thanks for the kind words!

I'd be interested in seeing what you could dig up, specifically in the Findlay area.
I've been watching the HUD and Homepath listings...actually acquired the 2 we got this year from HUD. The REO's are getting snatched up by OO, leaving the investors our of the equation. I've been (lately) considering Sheriff Auction but haven't been able to participate yet.

Best of luck to you on your endeavors!
Jason

 @Matt Devincenzo and @Brandon Hall 

Thanks for the info, very helpful!
I'll look more closely at the Pub 527 after my "real job" ends today but, a preliminary gander at it really provides insight, as well as your comments earlier.

I think I can figure things out well enough for the 2 properties we obtained this year but I'm not so certain on the properties that have been rented for awhile now.

Again, I'll see what I can learn from the Pub and do some more digging.

Thanks so much for your help and kindness!

Val, thanks for the reply!
Yes, we do take advantage of the Mortgage interest as we should...now, the depreciation thing is where I lack education.  I've read the Sched E instr form and seems that it's somewhat vague....additionally, I tried in the past to claim mileage, vehicle, etc but IRS disregarded it (without reason).  And, having done the taxes on my own, I didn't contest it.

I'll take your advice and consult a CPA.

Thanks again for your advice and Happy New Year!

Hello all BP members!
Really happy to have found this site, very resourceful and inspirational!
My wife and I have found a renewed drive to expand upon our investment portfolio.
We've held our previous homes as rental properties for a number of years and in 2014, we picked up 2 HUD's at a reasonable level, completely renovated and are renting them out.
We continue to consider further expansion (for rentals in the Findlay, OH area) and are also considering doing some flips along the way.  (Haven't done any flips yet but, considering, we can do the work ourselves and also having found some reasonable contractor support for high labor content (ie, drywall finishing, roofing, etc), we're now considering that avenue as well.
Open to any advice that BP members have to offer and look forward to connecting with folks having similar interests!