All Forum Posts by: Logan Allec

@Andy Huynh, I recommend that you point your tax professional to the code I mentioned above and see what he/she says.  If he/she has support to take the full exclusion without being shady, I'd love to hear it!

@Chris MacDonald Your trip must be primarily for business (ordinary and necessary -- necessary meaning more like "appropriate" than "absolutely have to") to get some deductions.  Easy rule of thumb is more than 50% of the days you spend on your trip must be business days.  A business day is a day in which you spend at least 4 hours working on business (travel time counts).  If this is the case then you can deduct all transportation expenses (i.e., costs of getting to and from the destination).  Once you're actually there, your expenses on non-business days (personal days) are nondeductible.  But you can deduct certain expenses on your business days (consult with tax adviser).  Be sure to document and substantiate.  Plan your appointments in advance in your calendar.  Keep a log.  Also weekends may possibly count as business days (even if no business is done on them) if you plan your trip right.  Devil's in the details of course but that's kind of a nutshell.

@Andy Huynh Why did you move out and rent it out for 6 months?

@Natalie Kolodij  Wouldn't the 6-month rental period be considered "nonqualified use" under IRC §121(b)(5)(C)(i) apart from proving that it qualifies for an exception under IRC §121(b)(5)(C)(ii) and therefore under IRC §121(b)(5)(A) the exclusion would not apply to the portion of the gain allocated to this period under IRC §121(b)(5)(B)?

IRC §121(b)(5)(C)(i) states that the term "period of nonqualified use" means any period (except before 1/1/2009) during which the property is not used as the principal residence of the taxpayer or the taxpayer's spouse or former spouse.

There is an exception in IRC §121(b)(5)(C)(ii)(I) whereby otherwise nonqualified use would not include any period after the last date that the property is used as the principal residence of the taxpayer or the taxpayer's spouse.  But that wouldn't include Andy's 6-month rental period because he in fact lived in it again after the 6-month rental period.

There is an exception in IRC §121(b)(5)(C)(ii)(II) for being on "qualified official extended duty."  If this applies, then Andy, I salute you!

And of course there is an exception in IRC §121(b)(5)(C)(ii)(III) if Andy had moved out for those 6 months "due to change of employment, health conditions, or such other unforeseen circumstances."

So I think that more information is needed, i.e., why did Andy rent it out for 6 months? so that one may determine whether he qualifies for the last two exceptions mentioned above.

Otherwise, I believe he may only be eligible for a partial exclusion.

Thoughts?

I've used them for the past couple years to invest my Roth in various real estate syndications. They've been fine.

I use QuickBooks Online personally for myself and my bookkeeping clients. However some clients who had been using Xero love it, and I'm slowly coming around as I continue to keep their books in Xero. I've also heard of Freshbooks but I don't know too much about it. Important thing is to just set one up, keep with it, and only pay your business expenses out of business accounts.

Welcome, @Sean Portune!  House hack a small multi using lown down payment financing if you can.  You're only young and (presumably) unattached once.  Might as well make the best of it!

@Angelo Wong unless you're a real estate professional:

1. You can only deduct travel costs to an area once if you have already established a business, e.g., purchased a property, in that area.  And even in this case there are specific rules that you must keep in mind.
2. Travel costs incurred before establishing a business, e.g., purchasing a property, are capitalized to the basis of the property once you buy it (in some situations some costs would be classified as start-up costs and amortized).
3. If you never establish a business, e.g., never purchase a property, in a given area, then travel costs to that area are simply personal expenses that you may neither deduct nor capitalize.

Andre Crabb I invest both locally (directly-owned properties) as well as "remotely" through syndications and private lending.

@Justin R. if after discussions with your attorney you are still under the impression that the location of the LLC doesn't really matter, then you may need a new attorney. @Katie L. has provided excellent information across the boards on this subject.

@Alexander McCairel great strategy. My first investment was a househacked 4-plex using FHA financing. It's a great first move!