All Forum Posts by: Michael McDevitt

In my experience, the limit increases property values.  It can be a problem for a buyer who wants to rent out their unit (if the rental unit limit is reached), but the buyers who want to live in the unit, will pay more if the development isn't full of renters.

@Patrick Kendrick, no it isn't really that significant.  But, if you find that you will have a large tax liability this year, every little deduction helps!  It is the same reason many of my business clients go on a "shopping spree" in December, to buy supplies and other things they can deduct for their businesses.  

Remember - It also reduces your deduction next year, because you will only have 11 payments in 2017, unless you do it again next December!

As a CPA, I have clients calling me all the time, asking me if the call or email they received was legit.  There seems to be a big increase with these IRS (and even State) scams.  They are always by phone or email.  @Jeff B. is correct - the real IRS will only contact you through USPS.  If you are unsure about whether a contact is a scam - ask someone who knows, like a CPA or even call the IRS help line.

Good question @Greg Rutkowski.  The answer is, a mortgage payment in 2016 would allow you to take that payment's interest piece in 2016.  BUT, be sure you send in the January payment by mid December, so the mortgage company receives it and posts it as a December payment.  I usually make mine around December 15th. 

@Dana Regan, sure you could have one LLC loan money to the other. The question is why? You would have to prepare a note, amortization table, etc, etc. The interest income one LLC earns would be offset by the interest expense to the other LLC. I would just take the money from one LLC and contribute it to the other.

Feel free to PM me if you have follow up questions.

@Brandon Sturgill, I am going to assume the seller is NOT selling his/her primary residence.  In that case, if the seller gets 100% cash, then he/she reports capital gain on the sale.  If the seller takes a mortgage from the buyer, the seller calculates the gain as if he/she receives all the money when the sale takes place, then the seller picks up a percentage of the total gain, each year equal to the cash received each year, divided by the total sales price.  It is called an installment sale.

Here is an example: if the house sells for $200,000 and the seller's cost basis is $100,000, the total gain is $100,000.  Let's say the seller gets $20,000 paid each year for 10 years (and we will ignore interest).  Each year the seller reports $10,000 gain, for ten years.  After ten years, the seller is paid and all the gain is reported.

IRS Form 6252 is the form you complete on your tax return.  See a CPA - it is a bit complicated! 

I have had an LLC in the past to hold rental properties. Now, I just have plenty (more than enough!) insurance. It is easier and I feel that I am protected better with insurance than an LLC. Plus, I don't have any of the headaches related to holding properties in an LLC.

No question is a dumb one, @Account Closed. I used to have an LLC to hold properties but now I hold them in my own name. The headache of trying to get mortgages and contracts in the LLC's name outweighed the legal protection o an LLC. An attorney told me, if I got sued, the LLC wasn't likely to protect my properties.

@Josh Brosius - you will have to make that choice.  There are good reasons to go with SFRs and good reasons to go with MFRs.  Your location will play a part in making that decision.  From your post, you seem to be leaning towards MFRs.

@Brock Nelson, what is your current personal situation?  Are you married, have kids, a mortgage, etc?  The reason I ask, is my advice depends on how much $ you need to make to meet your financial commitments.  If you are single, with little in the way of monthly bills, I would tell you to go find the best developer in your area and take ANY job with him/her.  Let them know that you want to learn and are willing to take a bit less than market wages for the opportunity.  If you have financial commitments, family, etc., then stay where you are and reach out to developers to network and try to create opportunities that way.