All Forum Posts by: Joshua Thompson

If your client works full time they most likely won't qualify as a REP however maybe a spouse could. 

As Greg mentioned you can do a cost segregation on a STR, LTR, or other real assets but your client may not be able to utilize the benefits of a cost segregation based on their full situation.

Typically, a client that has a STR and materially participates should be able to take advantage of a cost segregation done on the property. Assuming they aren't using the property personally over the allowed number of days.

Hi Meg,

If you're looking for someone in Atlanta, I can connect you with someone; however, they are 100% remote and very specific about the type of clients they bring on. 

If you're okay working with your tax professional remotely there are quite a few tax professionals active in the forum here. Depending on availability I'm sure most of them will be happy to connect with you.

Is her goal to be nice and provide some of the gains or reduce her taxes by trying to split income between her and her ex? If the client is in CA the community property state laws may help here (not entirely sure) depending on when the property was acquired but it would be a great question for an attorney as Jason mentioned.

If they were married and went through a divorce it would be worth looking into how the divorce paperwork stated how that property would be handled. Is the divorce final?

If her goal is to provide some of the proceeds to her ex in good faith, she can simply sell the property, have a tax professional estimate the taxable gains. With that she can determine, of the cash received how much should be set aside for taxes, then gift the ex-spouse a potion. A gift tax return will most likely need to be filed.

The property taxes will be on his Schedule A during the time the property was his primary residence, assuming he itemizes. Once it's placed into services as a rental, the property taxes will be a rental expense.

I agree with Gregory above and speak with the company he has his mortgage with. Many people buy a house with a FHA loan and then turn it into a rental but it doesn't mean it's always allowed. A mortgage broker would be able to answer this better. Perhaps @Anderson S.can help.

If it helps, I asked many clients this same thing and learned the clients who spend time each month updating books and records are the ones who spend less than 30 minutes preparing everything for us. 

The ones using software are hit or miss if it takes less than 2 hours or DAYS! With software, it's only as powerful as its user so some clients overcomplicate things and spend most of their time trying to "fix Quickbooks".

The most successful and quick clients keep it simple or keep it to their comprehensive level.

Hi Kin,

Three quick questions come to mind that would impact your situation. Would you be gifting this to your younger brother or selling your interest to him? If you sell your interest, would you do it based on the current fair market price?

Did your mother pass away and you two inherit the home? If so you may benefit from a step up-in-basis. Depending on the value at the time of death and your basis you may need to file a gift tax return.

I would speak with a CA attorney to determine the best type of deed to file and a tax professional to gather more information. Hopefully, this will give you some information to consider before moving forward and questions to answer 

 Of course and good luck!

 Yes, I agree with more information we could fill in the if, and, or buts.

Not a silly question at all but the answer depends on a few factors. If I assume this is a rental property, your income isn't over $150k, and you're not a real estate professional then the losses the rental property generates could offset other income up to a certain amount. 

This means you'll want to "write off" expenses related to a property you have in service because if those expenses don't benefit you this year they could in the future once you sell the property.

We can get into a lot more details with the "if" "and" or "buts" BUT I think this would be the "simplest" answer without diving into your specific situation here.

I hope this helps!
 

Yes typically you'll file the wholesale activity on a schedule C unless it was done in an entity (S Corp, Partnership, C Corp) but I see above you don't have these. If you've been active in this business and actively pursuing a profit during the year, the loss the business generates could help offset other income on your tax return. 

If you would classify this as more of a hobby which most people won't the first year, then the losses won't benefit you. Ignore this part if you're trying to make a profit with your wholesaling business.