All Forum Posts by: Lance Lvovsky

You need an attorney who practices in trust/estate planning and real estate. Ultimately your attorney will draft a Trust agreement with certain provisions in the trust regarding holding real property. In addition, you need a CPA who understands tax planning when it comes to trusts and of course your CPA should also invest in real estate

@Michelle Gomez Welcome to the forums! Feel free to reach out directly with any questions as you begin your pursuit of your first investment!

That margin interest could also potentially be deducted against your rental income (rather than as investment interest) which is more favorable. Please make sure you get consult with a CPA. Let me know if any questions.

The tax rate you pay depends on your individual tax situation. Generally, flips are taxed at ordinary income tax rates. If you are in the highest tax bracket, you may very well be paying around 50% in in income taxes combined, Federal and NY. Get with a CPA who can consult you. Let me know if any questions.

@Adem Tahiri Assuming the property was owned in your name, then Schedule E and the accompanying depreciation schedule would have all the pertinent information. If you sold a property held in an entity, then it would be Form 8825 and the accompanying depreciation schedule.

It may be a good idea for you to file an extension (if you owe taxes, then make an extension payment) and then get with a CPA after the 4/18 deadline who can assist you with the filing of your tax return.

@Abdul Q. Yes you can still claim on Schedule A both mortgage interest (subject to limitation under Code Sec. 163) and property taxes. It is ok that you took out an "investment mortgage". In the future if you were to rent the property, then you could take the deductions on Schedule E.

@Abdul Q. You can still continue to claim property taxes and mortgage interest (subject to the mortgage interest limitation) on Schedule A as itemized deductions. Any other expenses would be added to your "basis" so in the future when you sell the property, you would recognize a smaller gain.

@Jagpreet Singh It is not necessary to have a CPA in the state you are investing in. You want a CPA who also invests in real estate and works closely with other investors. 

Your CPA should not be reporting flips as capital gains. I recommend you get with a CPA who understands real estate investing. You would have been well under way with a loan had your taxes been filed correctly. You *might* still be able to amend your taxes. Let me know if any questions.

Are your parents charitable? Once RMDs kick in, there is something called the Qualified Charitable Distribution where taxpayers can direct up to 100k of their RMD to a charity and it won't be included in the taxpayer's income. Be sure to consult with a CPA on this.