All Forum Posts by: Joshua Thompson

Hey Mike!

I would say this, if you wanted to find cheaper tax preparation you 100% could but it might cost you more in the form of incorrect tax returns or inflated amounts of tax due. I agree with just about everyone above that the price should be either discussed upfront or in the engagement letter before services began.

It's different to know how much they saved you because tax preparation typically isn't a service to save you taxes, you'll want to meet with them during the year for this. However, some elections and decisions can be made during tax preparation that could benefit you but most clients aren't aware of these small changes that saved them money.

I would say focus on the relationship, if it's a good relationship and you trust them then keep working together. If cost is a big factor which I completely understand during these times, then search around but know finding that real estate-friendly accountant that is in the $1,300 (depending on your situation) range and having a good relationship with them might be difficult to find.

Lastly, ask her if additional services come with that price. 99% of the time the answer is no, but some firms offer free mid-year calls or check-ins for being a tax preparation client.

If you're comfortable reaching out to remote firms contact anyone here in the forums. I believe someone above said they aren't that expensive.

Yes, I've experienced this personally and many clients of ours have as well. By living in NY or having property there you most likely have nexus which requires you to register as a foreign LLC. Every state is a bit different when it comes to determining when nexus is established.

Speak with your attorney to see if it's worth doing this or if it's worth just having that LLC in NY.

This reason is often why it's recommended to set up an LLC in the state of the property. This is not a blanket recommendation for everyone though, each situation can call for a different answer.

Hi Emmanuel!

I would highly recommend two options:

1. Use the above feature "Build Your Team" and find that accountant. Granted sometimes they are remote which isn't an issue. I'm located in Texas as well but we are 100% remote working with clients. Sometimes the best tax professional for you isn't local.

2. Contact a few accountants you see active here in the forms. Typically if they are active in the forms they probably have a good amount of real estate investing tax knowledge.

Good luck and congrats on the new multi-unit!

 I'm happy to jump on a call and point you in the right direction. I'm in Texas as well (Dallas area) but we don't work with clients that have rentals in NY so we wouldn't be the best fit to work together but more than happy to chat for a few minutes. You can also use the "Build Your Team" function above biggerpockets has to find a tax professional and financial advisors that specialize in working with real estate investors.

Hi Michell!  

Without knowing the specifics of your situation, typically real estate can offset 1099R income but I wouldn't use this as a blanket statement. I'm not sure if you're working with a financial advisor but if you're retired, receiving 1099R income, maybe social security, plus income from other sources you definitely want to speak with an advisor. Depending on your investment strategy, goals, current life situation etc., your entire financial and tax situation could change and possibly not for the better. 

I highly recommend speaking with a financial advisor or your current advisors then bring a tax professional into the conversation. Someone recently made a wonderful post about Medicare Premiums and how they can change if you invest in real estate at an older age.

Depending on your income and tax situation you’ll most likely want to stagger the selling of rentals in hopes selling them all now doesn’t shoot you up into higher tax brackets. Keep in mind our tax system is progressive.

Planning is key here to determine your estimated income and how much gain or recapture each property may produce. If you’re working with a tax professional ask them to do a tax projection for you with one scenario assuming you sell all 5 today and the other assuming you only sold 2 today.

With the tax projection you’ll now have a good estimate of what your tax situation will look like and can make decision based on that.

Maybe you can consider selling your portfolio and doing an installment sale, this won’t help on the depreciation recapture but it would help spread the gain over multiple years.

Each strategy has pros and cons, if you want to rip the bandaid off an be done cold turkey (or warm turkey if you’re into that) there most likely will be a large tax hit but less headache holding them longer. Which do you prefer, less stress or less taxes?

Hi Angela! I think it's smart for your client to at least do a quick call with an attorney. We don't know what we don't know at times and most of them will give you 5 minutes to determine if it's a good fit. I believe you can use the Build  Your Team feature here on the website but I do have an attorney in mind, he has offices in TX, Mexico, and CA but believes he co-counsels outside of those states if needed. We don't receive a commission for this referral.

If your client operates in those areas let me know and I'm happy to refer him to you through a message. Full disclosure he is not cheap but he is GREAT at what he does.

Hey Sal! Welcome to the world of real estate investing! I highly recommend you use BiggerPockets Build your team function, it will help find real estate investor friendly services. This would be the best place to start, I would also recommend reaching out to a few individuals you see active on the forum. With you getting started I would also recommend buying 30minutes to an hour of an attorney and tax professional time. 

This should set you up for success and prevent any long term or expensive commitments before you get your first property.

 Sean is correct here and put it perfectly!