All Forum Posts by: Marc Howard

@Priscilla Avery 

Reno, NV is a great option if you're looking for affordable properties near the Bay Area. BRRR is a solid strategy too.

As for cost segregation and depreciation, they can be amazing tax benefits that boost your cashflow. Just make sure to consult a tax professional to get the most out of these strategies.

Now, about that LLC. It's smart to create one, especially if you wanna protect your personal assets. It's usually a good idea to set up the LLC in the state where you'll be investing.

So def dive in, get your feet wet, and make sure to reach out to professionals for guidance.

@Phillip Lebron 

Lowering your property's assessed value is def not a walk in the park, but it's possible.

First thing you gotta do is appeal with the tax assessor's office. And don't forget to gather some strong evidence like similar property sales or assessment inaccuracies.

obviously, a lower assessed value means less taxes. More dough for you, right? But there's a downside. When it's time to sell, potential buyers might think there's something fishy about your property with that lower value, making it tough to sell.

You got it right @Ray Slack. Being a real estate professional can be a double-edged sword when it comes to taxes. You can deduct passive rental losses from ordinary income, it might not be worth it for you since you don't have any mortgages.

The downside you metioned is spot-on. If you're classified as a real estate pro, your rental income could be considered "active," which means self-employment taxes. Although there've been some court rulings in favor of real estate pros, it's still a bit of a gray area. Honestly in your situation it seems like staying a non-real estate pro might be the better route. No need to complicate things, right? Just keep enjoying your passive income and don't worry about the classification.

I'd say a self-directed IRA might be better for you. A Cash Value Life Insurance plan can be good for tax savings and protecting your loved ones, but I'm not sure it would help you achieve your real estate goals. With a self-directed IRA, you can invest in real estate and other alternative assets, all while enjoying tax-deferred or tax-free growth. Plus, with your W-2 job and real estate agent income, you should be able to contribute to a self-directed IRA without any issues. Just make sure you follow the rules and regulations carefully to avoid any penalties or fees. I hope that helps!

Yep, lmk if I got this right. So basically, you're asking if you can deduct expenses like utilities, landscaping, and property taxes on your investment properties with no income stream.

In a nutshell, if your properties are not being rented or available for rent, then you cannot deduct those expenses as rental expenses. However, you may be able to capitalize those expenses and add them to the basis of your properties. This would increase the cost basis of the properties and reduce the gain when you sell them.

I remember when I had a property in Baltimore that was vacant for a few years before I decided to renovate it. During that time, I wasn't able to deduct any expenses as rental expenses. Instead, I capitalized those expenses and added them to the basis of the property.

Hope that helps!

Yep, just report the rental income you get from Zelle like you would any other rental income on Sch E. Keep a record of it. Longer records of income help with getting loans for more properties, in my experience.

Unfortunately while many tax pros are excellent at filing, are not the best at actual strategies. Its definitely ok to use a strategist for planning and another pro for filing (provided the strategies are very clear and can be handed-off). Hope this helps Katie

Hey Mike, no prob. Yep, you can file your state return with TT even if you've filed your federal return with FTUSA. Just need to input your fed info into TT so they match up. And sorry about that link! Here's a working one: https://turbotax.intuit.com/ta...

As for 3885A and RE bonus depreciation, I'm pretty sure TT supports it. But if you want to be 100% certain, maybe try reaching out to their customer support?

Glad to hear you don't have to worry about Texas filings! Lmk if you have any other questions or need more help.

Hey Zach- Ross made some solid points there. It does seem a bit tight on cash flow, but u got options. Flippin the house like Ross mentioned could be a good move, especially if u can spruce it up on the cheap. If you're set on holdin it, just make sure you're prepared for any unexpected expenses that could eat into your cash flow.

One thing to consider is property management. Are you gonna manage it yourself or hire a property manager? If you hire one, remember to factor in their fees into your calculations. Also, I'd double check your tax and insurance estimates, just to be on the safe side.

Here's a good article on seller financing that might help you out: https://www.biggerpockets.com/blog/seller-financing-real-estate

Yep, as an agent you're usually a 1099 contractor. Getting an LLC can be smart for tax and liability reasons. So basically, you'd create the LLC and sign your agent agreement with the brokerage under the LLC's name. Just make sure your brokerage is cool with that setup.

Check out this link for more info: www.nolo.com/legal-encyclopedia/form-llc-for-real-estate-agents.html

Are you planning to invest in real estate or just focus on being an agent?