All Forum Posts by: Joshua Thompson

Hello Resident Tax Gurus! 

I just started an S Corp and I'm the only employee.  I am interested in taking a training course.  Do I pay for this course directly from my S Corp account OR do I pay for it myself and expense it to the business?

Need real estate tax planning services in the Dallas Texas area

I had many experiences similar to that mentioned above when we "inherit" a client from another accountant. In most cases, these are accountants not specializing in real estate, though. 

Can't speak for others, but I personally would appreciate if a colleague of mine ever catches an error in the work of my firm and brings it to my attention. As @Linda Weygant said, nobody is infallible. I hope I'm close, though :)

Some of the red flags? OMG, a long list, @Joshua Thompson.

• Schedules C with zero income and large expenses, particularly interest, taxes, and repairs
• Flips reported at gross profit instead of full selling price minus cost of goods sold
• Flips reported as short-term capital transactions on Schedule D
• Schedules E with zero income and large expenses
• Schedules E with repairs several times higher than the rent
• Missing depreciation
• Losses from rental properties or K1s not showing up on 1040 (not always a mistake, but often is)
• All expenses grouped into some $40,000 "miscellaneous business expenses"
• Missing deduction for use of a business vehicle

there are another 20-30 very common errors and oversights, soon to include the missing 20% QBI deduction.

@Ashish Acharya,
It has been addressed with them and it crossed multiple years. I am not mentioning names here as I do not believe in that kind of Karma. We all make mistakes; however, I have seen these same mistakes from these preparers in the past. Alos there is an issue called 7216 in which I cannot discuss that client with another preparer except in concept. 

I appealed my property taxes like I do every 2 years . I took pictures of the properties . To show the condition . I examined the property work sheet and found some things that were wrong  , sq footage was too large . My biggest complaint was the "land value" .  On a recent purchase , they had the land valued at $190,000 , but the purchase price of the house and land was $160,000 only 1 year ago . Total assessment was close to $250K .  ( things are not rising that fast around here)  I did have some other recent sales of similar properties and vacant lots , NONE were even close to $ 190K on the land alone .  Similar properties were selling $140K to $225K .  

It was a 1 on 1 conversation with a rather nice state employee . Now the interesting part is they have arial photos going back to 2006 , year by year . The guy says they are flying planes over the whole state all the time taking photos . He showed me , There was 1 picture where I could see my tools layed out on a picnic table while I was working and I was in the picture (wearing the same coat I had on in his office)

I asked him to go back to 2006 on 1 property and show the progression , I showed him where I have been removing buildings and they need to be deleted from the tax records . One that I removed wasnt shown because it was recent , and I told him . He then said he believed me , due to the progression in previous pictures , and the condition in the older pictures .  I will wait and see what they say 

 Generally, you don’t have an option to write off most of the renovation cost. You have to capitalize them to the basis. 

Some of the cost that you might be able to write off would be your operational cost for your partnership (LLC) that is not related to renovating the houses. Such as Advertising cost can be deducted. Legal and accounting expense for the creating LLC can be expensed up to 5000.

You can do the same thing to some of the start up cost. Deduct up to 5000. 

These rules do come with phase out and exceptions. 

Might wanna talk to your porfessional. While talking to him/her, ask if you could save taxes if your elected to be taxed as S-corp. Your professional will be able to answer that after analyzing your numbers. 

I have been following the forum for info for a while, but this is my first time posting. I tried finding a answer to this question online, but don't really get anything.

I own 2 properties. One is a rental so the tax situation on it is pretty straight forward. The other is my primary residence in Virginia, but I am currently renting it out while I am renting another property in Arizona. My rental income at the Virginia property is the same as my rental expenses on the Arizona property. The reason for the situation is a temporary work contract after which I would most likely return to my primary residence in Virginia. (+- 18 -24 months). My question is, should I be liable for taxes on the full rental income, if my expenses matches it, or how is the tax situation handled?