All Forum Posts by: Juan Contreras

 Thank you!

 I see.  I thought they maybe been related considering that they are about the same amount.  Thank you for clarifying 

I would like to make use of the special allowance.  However, I would be filing as head of household.  Would that mean that I would only receive a $12,500 allowance?

This is what the IRS writes:

Special $25,000 allowance.

If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that’s disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing the passive activity loss. Similarly, you can offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception.

If you’re married, filing a separate return, and lived apart from your spouse for the entire tax year, your special allowance can’t be more than $12,500. If you lived with your spouse at any time during the year and are filing a separate return, you can’t use the special allowance to reduce your nonpassive income or tax on nonpassive income.

The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. See Phaseout rule , later.

There is no mention of any allowance for head of household, or for single individuals for that matter - only married filing separately, which would be $12,500 - same as the standard deduction for a person in that category.  Is it safe to assume that the special allowance for single individuals would be $12,500?

Wouldn’t it also make sense that a head of household would have an allowance of $18,500 being that this would be their standard deduction?  

Just wondering if someone with more knowledge on the matter might know the answer to this.  

This is some solid advice.  Do you know where I might be able to find a resource for information like this?

Hi everyone, 

I currently have two properties in Dutchess County but am looking to expand in the capital region. Specifically Albany and Troy. I am just wondering if anyone has tried Brrrrr in that region and what their experiences were with ARV when cash out refinancing. There are some decent two family properties that are in need of rehab but I am just unsure of what the ceiling is as far as what banks will appraise them at. Ideally I would be able to purchase and pull all invested money out but it looks like properties in the area don't go for more than about $150K. Anyone aware if its possible to pull upper $100's or $200k out of a two family? I'm looking at properties in more distressed areas such as 1st, 2nd, and 3rd street if that helps any. If not, does anyone know where I could get this type of info? If this post isn't clear enough please feel free to ask any questions. Thank you

Hey everyone. I will be using a HELOC to fund the purchase and repairs of a distressed property. I am planning on using the BRRRR method. Based on what I have learned, you never want to go over 70% of what you estimate the bank will appraise the house at. However, I am unsure of how the bank deals with the standard down payment on a mortgage.

If I do BRRRR do I still have to pay 25% (two family) for the loan? Or does the bank only offer 70% because they kept the other 30% as equity built into the home and that functions as the down payment?

For example:  

I buy a home for 100k.  I put 100k into repairs into it totaling 200k. The bank says the house is worth $280k and offers me the loan on 200k because it is 70% of the 280k.  Do I have to pay 25% of 200k because I am opening up a new loan?  Or is the remaining 80k already built in equity?  

I will be filing as S-Corp soon in order to begin flipping business. I will be using a HELOC to fund purchases and repair costs. After rehabbing, I would like to keep/mortgage the homes as investments properties in a separate LLC. Should I use the pass through entity to write off the costs of repairs and use the other benefits of the S-Corp then sell it to my other LLC? Essentially, it would be a flip that I would buy.

I will be filing as S-Corp soon in order to begin flipping business. I will be using a HELOC to fund purchases and repair costs. After rehabbing, I would like to keep/mortgage the homes as investments properties in a separate LLC. Should I use the pass through entity to write off the costs of repairs and use the other benefits of the S-Corp then sell it to my other LLC? Essentially, it would be a flip that I would buy.