All Forum Posts by: John Woodrich

I would estimate between $1500-$2,500 (annual fee) depending on how organized you are and what all you actually have going on.  This could be a little more if you are expecting them to handle payroll for you also.  This would probably include individual tax prep, S-Corp tax prep, possible tax planning in the fall and general questions that come up during the year.  Nobody can really give an estimate until they see your returns and from there we often make a leap of faith hoping that your accounting is in order.

There isn't an apples to apples comparison here as some CPAs only prepare a return and dissapear until the next year while others are around to answer questions, complete tax planning for your S-Corp, and offer more of an all inclusive service.  You also have to make sure you are using a CPA, I have probably seen a hundred returns prepared by a "CPA" who wasn't a CPA.  In tax ANYONE can get registered with the IRS to prepare returns for compensation and their is no licensing criteria.

Our industry is severely understaffed so you may be talking to a company who gave you a high rate as a "We aren't interested but for this price, we will make room".  Kinda like the contractor who gave you the crazy bid, probably didn't want the job.  I don't know any CPAs who are actively searching for clients and every firm I know would love to hire another experienced CPA.  They are modifying the CPA exam again as the younger generation is not as interested in the commitment it takes to become a CPA and the industry is likely losing more CPAs each year than it is gaining.

Interested who the Mpls company was that you talked to, could you message me?  Curious if I know them or if it is my old firm.

The IRS has no reason to care here - the IRS taxes you the same regardless of what state you are in.  CA will care as you have someone trying to commit tax evasion and not pay CA tax. It is no surprise that people don't want to pay tax in the high tax states and CA is onto this.  Each state has their own rules as to who is a resident.  The first step in re-establishing residence is to spend more time in another state.  It doesn't stop there, that is just the first step.

If you live in CA you are a resident of CA for tax purposes. Being a high tax state I am sure CA is very good at auditing this like MN is auditing people moving to FL. From an income tax perspective you are a resident of CA either way. If your DTI works out you could buy it as a second home or a vacation rental but you can't "pretend" to live in another state to pay less tax. That is tax evasion and a serious crime. Also very easy to audit as they can look at your banking information and credit card statements to see where you are spending your time/money.

@James Hamling Not solo but not an office of 50 people.  Haven't talked to him in a bit but I have some clients who use his company.

@James Hamling The owner of Twin Cities Leasing gained his experience working at your employer many years ago.

Definitely reach out to Options Exteriors - here is their number (651) 705-6376

I have some clients who use Twin Cities Leasing and have heard no complaints.  James manages quite a few properties and got into this by working several years at one of the larger national PM companies.

Could you prepare a special allocation like this - yes.  But the allocation isn't likely to meet the substantial economic effect test.  Would be very easy for the IRS to throw out an allocation that is clearly tax avoidance and has no intended economic effect.  This is a very complex area of tax and not an area someone should DIY.  Anyone interested in allocations can try to understand this "overview" which is "easy" to understand https://www.thetaxadviser.com/...

If the seller's goal is to simply get rid of the day-to-day but they still want passive income a 1031/DST would be an option to move into another class of investment. However - DSTs don't have good liquidity and you pretty much lose all control of your money. A syndication could work if they were to allocate him losses to help offset some gain but if that is not an asset class he is interested it won't matter.

Seller finance won't help him much either as the depreciation recapture tax will all be due in the year of sale.  Only the capital gain portion would be deferred on the installment method.  Many sellers are surprised by the tax burden.  I suspect this is the portion of tax the seller is more surprised about.

You may be able to work out a partnership where he sells you units and you get into an operating agreement where he is paid without managing the operation with you taking over the existing debt but there are some traps to it and he may not want to invest with you.

He is in the scenario we all hate being in - nice to sell property at times but nobody wants to pay the tax.  No easy way around it.

Correct - The eviction moratorium is not relevant, he can give a non-renewal/lease termination letter and end the lease.  If they won't leave, he can evict.