All Forum Posts by: Kelly O'Keefe

Great post! Thankyou @Account Closed

Has there been any issues with the tenants and shared spaces in the house? what is the average length tenants are staying?

@Dan Kurtz

Welcome to the site! I used to be in Denver, are you doing STR or LTR?

@Desiree L. congrats on the deal. It is always good to hear how the podcast strategies work in action!

@Amit Shukla the STR loophole allows you to take losses from passive investments and deduct them against active income by material participating in your property.

Some participation test (technically 7 test)

• You participated in the activity for more than 500 hours. OR
• Your participation was substantially all the participation in the activity of all individuals for the tax year, including the participation of individuals who didn’t own any interest in the activity. OR
• You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who didn’t own any interest in the activity) for the year.

Another great post! @Michael Plaks

@Persephanie A. I was in the military as well and lived over seas for five years. I am sure you will love Japan, I have only heard amazing things!

I will second Sean's comment and say Nate Meeker has a lot of experience focused on real estate specific accounting in California. I would also suggest having a great plan for tracking and managing the property. I think a local property manager would also be really helpful. My guess is that while you are over seas you will want to know the property is being taken care of while you are away. There are some advantages tax wise to being able to manage the property yourself, however material participation will be really hard from Japan.  

Hi @Joel Oh

To be considered a Real Estate Professional you need to meet the threshold of 750 hours annually AND more than half your time. Therefore if you are contributing 40 hours a week at your W2 job you would need to be able to substantiate 41 hours a week in real estate. This is why it is so hard for W2 earners to claim. 

You can qualify for material participation for short term and long term properties. Here are the requirements:

• You participated in the activity for more than 500 hours. OR
• Your participation was substantially all the participation in the activity of all individuals for the tax year, including the participation of individuals who didn’t own any interest in the activity. OR
• You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who didn’t own any interest in the activity) for the year.

For longterm rental the maximum loss you can take is capped at 25k a year, and this amount begins to be phased our between 100k in W2 income and caps at 150k in income. If you are a Real Estate Professional this cap does not apply and hence why it is such a powerful status for tax planning.

As @John Underwood said, Schedule C income categorized by "substantial services" such as turn down services, meals prepared, or special activities provided. If it is a turn key property managed by a property manager or you have limited interaction with your guests it would most likely be considered passive income and filed on a Schedule E

Hi @Stefan D.

I think you have come to the right place looking for help. Here is a pretty good article from Michael Plaks that breaks down pricing. (I tried to @ him but it wouldn't let me) https://www.biggerpockets.com/forums/51/topics/998718-explai...

There are several factors to consider that dictate price, but overall you can find someone for that price range. If you are looking into strategies such as cost segregation or other less common tactics I might look into spending a bit more just to ensure it is done correctly. 

Here on the site there is 20+ tax professionals that could help you. I would recommend browsing the forum and seeing who is answering questions similar to what you might have, going to the "build your team" section, and/or scheduling a conversation with a couple candidates and see who you think would be the best fit knowledge wise and price wise. 

Good luck!

@Jun Lopez unfortunately many a CPA wouldn't be what you call a "people person." Probably correlated with being attracted to a career consisting of sitting alone in a room and staring at numbers all day. 

That being said I know it can be frustrated waiting weeks between emails. I think having a CPA local means you could potentially pop in and ask questions, but even then most would ask for an appointment to be scheduled prior to and they might not have openings for a couple weeks. Just something to consider 

@Jillian Bibbins Fortunately, you can deduct the contractor expenses for things missed by inspections.

I agree, when I launched my first rental property it was a little overwhelming and tracking income and expenses wasn't my first priority. One thing you can do to set yourself up for success, is to have a separate dedicated bank account for each rental. This will be a life saver when you file or start working on tax planning.