All Forum Posts by: Jeff Nash

I assume you are talking about the monthly phone bill and not the cost of the phone.

Technically if your cell phone was used exclusively for business and used equally per property you would handle it that way.  I doubt it was used equally though as there was probably a property or 2 that gave you some more trouble and resulted in additional minutes incurred and that would be impractical to track.

My take is with an expense like this (and other smaller general overhead) it probably won't take too much time and effort to just allocate it across the properties using a reasonable approach in the first place; however, I assume it's pretty de minimis and I wouldn't object if someone opted for a more expeditious approach.  If the expense was significant and you had a history of over allocating it to one property rather than others and then sold it later (with passive loss carryovers being released) I suppose that might an issue but that's just food for thought.  I think I've written more here and you probably could have allocated it already!         

I’m not sure if this is something you would be interested in, but HomeRoom is a company we have worked with from an insurance perspective and have properties in attractive markets across the US - https://livehomeroom.com/?gcli.... 
They have a rent by the room model.  

@Harrison Sharp might be someone to connect with.

I'm not sure what you and your partner's financial situation and credit history look like, but you can use private credit and hard money loans, borrow from family if that is an option, leverage from your own financial resources, bring in other equity partners and JV to some degree on each project, etc.

Your fact pattern is very high level and you are looking at 2 very different markets. What area are you referring to in each state?  Have you gotten any market information yet? 

In an ideal world you could buy and live the residence in CT for 2 years and sell it once you leave and not pay any taxes, but I am not sure how much appreciation you’ll get there in such a short period in the current market.

I would ask someone on here to help you with analysis after providing more information. 

@Raj Shah I assume this was factored in, but just in case it was not there should be an allocable amount for land which is not depreciated. I've seen more than a fair share of returns where there are buildings and improvements with no land basis.

@Dominick Johnson the comments above are all great possible options depending on the situation. 529 for education, UTMA/UGMA (but you'll give up control eventually), Roth IRA if you can justify and substantiate the activities and tasks they perform (can't just issue a 1099 as it is assumed you have control over their activities and supervise). There are a few court cases over age and in the mid to high digits is supported (depending on tasks and work performed). If it was really important to you you could probably even do an NIL situation for website and advertising/marketing, but an actual contract or agreement with some analysis of pay would have to be done which would come with planning and upfront cost.

Another thing is cash value life insurance, preferably with a mutual company.  We’ve used that for our son and did it immediately when he was only a few months old.  We designed it a certain way so plain vanilla is not necessarily the best.  There are other reasons for doing this outside of investing such as guaranteeing his insurability, as life insurance is primarily for protection first. It is not something we are looking to get some knock out return on but just a way to set him up (and presumably heirs) for the future.  

We also do have him set up with an UTMA for a small amount.  We use it for educational purposes and talk with him about it frequently to the point that he asks how his account is doing and wants to know why, and also see if he is beating his older cousin!

The ASCSP website https://www.ascsp.org/about-th...might give you some insight into what topics and areas practitioners need or should be knowledgeable.  There are some very specialized firms that perform cost segs as well as public accounting and tax firms. It is a unique skillset of someone well versed in a blend of tax and engineering/construction.

I would go back to the original preparer for sure  and explain the situation and hopefully they will not charge you so much that the cost outweighs the benefit. If it’s an innocent omission and an expense that you can easily substantiate I would not be dissuaded from amending the return due to any perceived audit risk if all else is good and you are confident in any tax positions taken, as applicable. 

It looks like you both share responsibility in this situation - you didn't provide the information and the tax preparer neglected to do a simple comparison of the prior year to the current year and ask you the question about why there were no HOA expenses.

The original preparer already has the inputs in the tax software and presumably did the other required due diligence. If you have another preparer do it, it’s almost as if they are redoing the return and having you complete an organizer, collecting your tax documents, making inquiries and documenting. entering data into their software, etc so the cost should be more. You could also do it as well if you believe you are competent enough and think it’s worth your time.  My guess is that this is not really a good option though, but it’s an option. 

Perhaps this tax year you consider other alternatives if you don’t have a long-standing relationship with the tax professional or organization.  You might just chalk this up to a minor mistake though and don’t believe it is indicative of other potential issues based on your tax situation.    

Based on your fact pattern (was a personal residence first and then a rental, not vice versa) I think you might be looking better. That non-qualified use provision was written so that taxpayers couldn't convert highly appreciated rentals to personal residences, live in it for 2 years, and avoid paying any capital gains. So I think you might have misinterpreted what it was saying and it  might make sense if you read the worksheets carefully - you do not include any period of non-qualified use that occurred after the last day that the taxpayer or spouse used the property as the principal residence during the 5-year period prior to the date of sale. You count the days backward from the time of sale to address your last point. Hopefully you will be pleasantly surprised with the outcome.

A custodian has to be involved similar to a SDIRA.  This is not as prevalent as 401K or IRAs, but nevertheless can be used.  I think the reason is that HSA's really have not been around for that long (just over 20 years) and the contribution limits are not high relative to 401K and other DC/DB pension plans.