All Forum Posts by: Account Closed

Anyone still searching for a CPA? April will be here before you know it!

A 1031 exchange, also known as a like-kind exchange, allows taxpayers to defer capital gains taxes on the sale of certain types of property if they reinvest the proceeds into a similar type of property. However, there are specific rules and requirements that must be followed to qualify for this tax deferral.

In the situation you've described, your client wants to use a 1031 exchange to buy his mother's land. However, his mother purchased the land less than a year ago. This poses a challenge because one of the requirements for a 1031 exchange is that both the relinquished property (the property being sold) and the replacement property (the property being purchased) must be held for investment or used in a trade or business.

If your client's mother purchased the land less than a year ago, it's unlikely that it would qualify as replacement property for a 1031 exchange because it hasn't been held for investment or used in a trade or business for a sufficient amount of time.

However, there may be other options available to minimize the tax implications for your client and his mother:

1. Hold the Property Longer: If your client's mother holds onto the land for a longer period of time and can demonstrate that it is held for investment purposes, it may become eligible for a 1031 exchange in the future.
2. Consider Other Investment Properties: Your client could explore other investment properties that have been held for a longer period of time and would qualify as replacement property for a 1031 exchange.

As a specialized real estate CPA, I'm here to provide expert guidance on your most complex tax matters, from navigating 1031 exchanges and cost segregation studies to optimizing your rental property deductions and handling multi-entity structures. Whether you're a seasoned real estate investor or just starting out, fire some questions at me and let me provide you with some insight that I'm hoping will be helpful to you in your investing journey!

Yes, that's correct. As a partner in the LLC, you and your wife will receive a K-1 form from the partnership, detailing your share of the income, deductions, credits, etc., for the tax year. This K-1 information is then used to report your share of the partnership's income or loss on your personal tax return (Form 1040) using Schedule E (Supplemental Income and Loss).

The tax treatment of replacing HVAC systems depends on various factors, including the type of property (residential or commercial), the cost of the systems, and whether they qualify for immediate expensing or need to be depreciated over time.

For residential properties, the cost of replacing HVAC systems is typically considered a capital improvement rather than a repair. As such, you generally cannot deduct the entire cost in the year of purchase. Instead, you may need to depreciate the cost of the HVAC systems over their useful life.

For commercial properties, under the current tax laws, you may be able to take advantage of immediate expensing through Section 179 deduction or bonus depreciation for qualified improvement property, which includes HVAC systems. This allows you to deduct the entire cost of the HVAC systems in the year of purchase, rather than depreciating it over time.

Any real estate agents in North Carolina??

Noah -

As correctly mentioned, holding a CPA license holds weight. 

I came to America when I was just 21 years old and quickly got my CPA license.

I worked for small accounting firms before getting picked up by Deloitte.

I was with Deloitte for 14 years in their asset management practice. I joined RSM as audit partner in 2004 and had a very successful career there along with a couple other large accounting firms. I have built hundreds of millions of dollars' worth of practice(s) and have led very large national teams.

I have been in my own practice for 4+ years and am thoroughly enjoying it. There has never been a lack of work in this industry, and I have made tremendous connections in my career. One experience has always led to another bigger and better experience for me.

Thanks.

Kislay Shah CPA

I am interested in North Carolina as a market to potentially invest in.

Can anyone provide feedback on the market? Good place to invest?

Also, I have a few properties of interest and would like to be connected with real estate agents in the area.

Thanks.

Kislay Shah CPA

When you demolish the original structure and build a new one, you typically cannot continue to depreciate the cost of the original structure. Instead, you start depreciating the cost of the new construction.

In your case, you would start depreciating the $200,000 cost of the new structure that was completed in January 2023. The $100,000 cost of the original structure in 2021 would not be depreciated further because it was demolished.

So, for tax purposes, you would only depreciate the cost associated with the new construction, not the original structure that was demolished.

Our extensive clientele base spans across the country, and while we may charge a minimum fee that may deter a certain percentage of prospects, we believe in emphasizing the value that a competent CPA brings to your investment operations.

With over 25+ years of experience serving in large middle market accounting firms, I bring a wealth of knowledge and expertise to our firm engagements. It's important to note that our fees may be higher than some other CPA firms, but we firmly believe that the value we provide far exceeds the cost. A competent CPA can save you more money than their fee, making it a wise investment in the long run. I'm sure the other tax professionals in this forum can agree on this.

When considering a CPA or tax professional, it's crucial to find someone who aligns with your financial goals and understands the complexities of real estate transactions. I recommend seeking a professional who charges for the value they bring to the table. In my practice, I am committed to delivering exceptional service and leveraging my decades of experience to benefit my clients.