All Forum Posts by: Michael Plaks

@Alex M.

1) Yes, separate. Not only for tax reasons - for basic money separation. You never want to mix money when you have partners in one of the businesses but not the other. 

2) You may or may not benefit from S-corp. Depends on numbers. I would not go the S-corp route without getting customized advice. Form LLC now, but you have until 3/15 to make the S-corp election.

3) This is an attorney's question, and I'm not one. Usually attorneys recommend to create holding LLCs in the same state where they will hold properties, regardless of your residency.

@Jeremy Janszen

These days, having a local accountant is no longer critical. Many of us here on BP work remotely, serving clients nationwide. Happy 2018!

@Chris K. and @Kyle J.

I also believe there is no risk to prepay EITHER way. If we eventually find out it is deductible in 2017 - great. If it turns out, after the dust settles, that it cannot be deducted in 2017 - then we deduct it in 2018.

In other words, prepaying at least gives us a shot. Waiting and not prepaying robs us of that shot, for sure.

@Leland Dunn

You're correct that nobody knows for sure at this point. I believe that you qualify, and no LLC is needed, but it's too early to say it with confidence. See more discussion on this thread.

Don't think so. The assessment date in IL is Jan 1, 2018 for the prior year - which is 2017. Until next week, 2017 IL taxes are NOT assessed - and therefore cannot be prepaid.

That is how I read. I can see how it could be read differently, but I believe my reading is correct.

@Patrice Penda

You answer is correct, but it's not what @Joe Moore asked. :)

He asked if he had to pay before Jan 1 to count as 2017 payment - and the answer is absolutely yes.

(You answer was whether he is allowed to prepay 2018 taxes - a different issue)

@Chris Pomerleau

Not sure why do you think you need an attorney. Tax attorneys are needed for advanced tax controversies (i.e. suing the IRS). Business attorneys are needed for asset protection and setting up business entities like LLCs. 

For business and tax planning, you normally use accountants: CPAs or EAs.

 Correct. And it is not from the new tax bill. It has always been the case.

Correct - property taxes and mortgage interest for rentals are NOT affected 

Your attorney seems to contradict himself. He first says "must be prior to 1/1" and then says "the assessment date is 1/1". English is my second language, but it sounds to me like "prior to" requirement is NOT met.