All Forum Posts by: Kelly O'Keefe

I will come out!

@Matthew W.

Thanks for the break down, it is really helpful. Can I ask what you are using the systems for? For example, are you using the lease agreement features, or using it to collect and schedule payments or just to track your portfolio?

@Landon Mizuguchi

I agree with @Nate Meeker you need to find someone that is a good fit for you and your individual needs. I would schedule a few calls and have a few specific questions you can ask potential tax pros. I would also know the difference between tax filing and tax planning as this will have an effect on pricing. 

Best of luck

I think Stessa is a great product but not linking correctly is one issue I have heard of. Quickbooks is another platform which has a high learning curve and isn't necessarily meant for REI. What specifically are you looking for out of your software?

Hi @April Birdsong

Without knowing all the specifics of your situation it is hard to give a definitive answer. There is a phase out between 100-150k that can limit the amount of loss you can take. However, if you are qualifying for material participation then you have the ability to take those losses and offset your active W-2 income; which is probably what you heard in the podcast. Other beneficial tax strategies would be a cost segregation study and bonus depreciation which would allow you to accelerate your depreciation and not have it set at 27.5 years. 

Hope this helps 

Hi @Jaxson Ruff

what issues have you been having while talking to the CPAs? I am glad you are open to remote I feel like it is way easier to find a niche CPA specializing in REI remotely. There are quite a few tax pros here who would love to help.

@AnnMarie Bacchus

I think it is based on your current knowledge base and need. It can be extremely beneficial to have a tax pro in your corner. Once you have a tax pro they can help you on more complex matters such as Cost segregation, material participation and effective tax strategies that can be used to reduce W-2 income. You may be struggling to find a tax professional as these options are not available until you own have at least one property in your portfolio. 

It is entirely possible to manage your own taxes and educate yourself but this is time many can't commit to. I always recommend bringing in a tax professional focused on real estate when you think your portfolio is getting too large for you to manage or have questions that are more complex than a basic search. Usually most investors begin to see a need at 3-5 properties. However, this depends as well. Some investors can manage 10 without issue and some need help at one property. I think it would be worth It to schedule a few consultations and ask what you can expect if you hire that company and how it will benefit you.

The bottom line is having a RE focused tax professional is a great option that can be worth its weight in gold. If you feel comfortable self managing your taxes and have the time this gold can be saved and applied to your first property. I would recommend focusing on the education piece right now, doing research, and potentially signing up for a program so you can learn more about how real estate properties are taxed. Then you will know the basics and know what questions you need to ask to know if you are the right fit with a professional. This will also save time if you are paying by the hour as there will be less time spent explaining basics. 

Hope this helps 

Looks like quite the project! Id love to see some photos of how it turns out

Hi @Javier Aguirre Martinez

I would recommend looking at hiring a tax pro who can work with you remotely. If you want to find someone with expertise and experience in real estate it may be hard to find someone locally. On Biggerpockets there are 20+ Tax pros who could help you with filling and tax strategy related to real estate. 

It is difficult to give a definitive answer without all of the details, but from what I gather it would be difficult to claim a loss or startup costs without closing on an investment property. In general, investigation expenses and participation comes into effect when you close. Here is the excerpt from the IRS I am basing my answer off of. 

Section 1.165-1(b) provides that, to be allowable as a deduction under § 165(a),
a loss must be evidenced by a closed and completed transaction, fixed by an
identifiable event, and, except as provided in § 165(h) and § 1.165-11, actually
sustained during the taxable year. Section 1.165-1(d)(1) provides that a loss is treated
as sustained during the taxable year in which the loss occurs, as evidenced by a closed
and completed transaction, and as fixed by an identifiable event occurring in such
taxable year.

If anyone else has a recent example of how they claimed this type of loss please let me know.