All Forum Posts by: Michael McDevitt

Another CPA here and I agree. Make sure you find a good CPA and have your tax returns amended to give you the passive losses you should have gotten. Unfortunately, taxes aren't simple and not every tax preparer knows what they are doing. It sounds to me like the tax preparer didn't bother to check your old tax returns for the passive losses, so he didn't show them on the returns he prepared. That is a common error.

I would hold and rent the property out. But, that is what I do. You would have to decide whether to become a landlord or a flipper. I would assume with the numbers you showed, it would cash flow as a rental, but you are missing some information for me to be sure of that. What do you want to do?

Ouch, this sounds like a tough spot t be in as a landlord. On the one hand, the offender has a right to live somewhere. On the other hand, if he lives on your property, you rightly would want to inform any possible renters that he was there. I don't know if I am right or not, but if it were me, I would not offer him another lease when his expires. I think he creates too many issues for possible other tenants. I am interested to k ow how other people feel about your issue.

It has always been my experience, that the most popular apartments I rent out, are two bedroom. There is a lot of reason for that, but that is my experience. Check your area to find which are in highest demand.

@Kit Dumph - maintaining an LLC in Colorado is pretty easy. Once a year, you will need to file an annual report with the Secretary of State, to keep it as an "active" LLC. You just go online to the SoS's website and pay a few dollars, and type in any changes, like an address change, etc. If the LLC is owned by only one person, that is all you have to do. If the LLC has two or more owners, the LLC will file a federal and state income tax return. That's about it.

Here are a few more areas...Woodbridge, Metuchen, East Brunswick and Piscataway.  I used to live in NJ and invested in duplexes in Middlesex County.  There are plenty of them! 

@Rotimi Lademo - my first came by driving for dollars.  There was a two family home in the neighborhood where I lived, with an old For Sale by Owner sign.  I called the number but never an answer.  After a month of calling, I finally got a call back from the owner.  He was a frustrated landlord and wanted out quick.  I made an offer I never thought he would accept, but he did.  I actually hand wrote the contract on his kitchen table.  We then had my attorney draft the final version, which superseded the  hand written one.  I made about $60k on that deal, after finding good tenants and minimal repairs.

It is really your call on whether to sell your PR or not.  How much in capital gains do you have on your PR?  Would the PR make a good rental property, or would the cash on sale be better used to buy better rentals?  

Step 1: get to a good attorney - fast!  Don't talk to the RE agent or the seller until you speak with your attorney.  Find out if the contract is binding or if you have any way out.  Also, find you what liability the RE agent has to you, by giving you bad advice.  

No matter what, this is going to cost you some cash.  Hopefully, it is only a few hours of time by your attorney to make this mistake go away, but it could get expensive.  Good luck!

I am a CPA and you should never operate as a C-corporation.  Well, there are very, very few reasons that you would operate as a C-corporation, but not in your case.  A C-corporation subjects income to tax two times, the corporation itself is taxed on its income, then you are taxed again personally when you pull money out of the corporation.  It is a terrible way to go.

I agree with @Doug Rose, that most cases, S-corps are good for active businesses and LLCs for passive businesses or holding RE.

Get with a good, local CPA fast, before you make any moves you can't take back.