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All Forum Posts by: Mohamed Youssef

Mohamed Youssef has started 17 posts and replied 71 times.

Post: What state is the best to open an LLC for real estate investment

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

Hello, the State to incorporate is usually the same where the property is located. Usually, a single-member LLC to avoid filing separate tax returns. If you have multiple members it will be treated as a partnership and will require a separate tax return.

Post: do I have to file a quarterly tax

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

Hi Sandra, as soon as you can estimate the amount of gain you will recognize from the flip you should pay an estimated tax on that amount. Until then, no need to make any estimates since the amount of gain can't be calculated.

Post: Reporting loss from a rental property fire and the insurance proceeds

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41
Quote from @John Chapman:

I had a rental house that burned down.  I have owned it for a very long time and had depreciated most of the original purchase price.  I had replacement coverage insurance and received about 300K to restore the house.  Since my adjusted basis is about 50K, am I going to have a $250K gain on my income taxes this year? Is there anything I can do to reduce the gain?

Hi John, the insurance proceeds due to a fire is not taxable. 

Post: Real Estate professional logbook example

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

If anyone is still interested in a REPS log I created one in a Google sheet with some examples. Feel free to let me know and I will be happy to share the link. 

Post: If you use a CPA or Tax Professional, how did you find him or her?

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41
Quote from @Wesley I.:

Found mine while attending a real estate/small business tax conference.


 Hello Wesley, do you mind sharing the name of the RE tax conference you were referring to? I'm not too far from San Diego and always looking for good conferences close by to attend that focus on RE and taxes. Thank you!

Post: Do I need a Real Estate Tax Accountant?

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

If it is only one flip for now, I suggest you find a CPA just to advise you on State filing requirements, ensure you are claiming all write-offs and issuing 1099s, etc. The CPA does not have to be specialized in RE if it's only one property.

Post: Bonus depreciation on primary converted to rental

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

If you have lived in the property for more than 14 days or more than 10% of the rental days then yes, no rental losses are allowed (i.e. bonus depreciation). You can find this under section 280 A

Post: STESSA for bookeeping

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

You may want to consider www.xero.com as a QuickBooks alternative. I highly recommend it and their prices for basic accounting ledger is much more reasonable than QB.

Post: help for a newbie re taxable rental income

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41

This is not true. Rental income is reduced by all rental expenses (i.e. interest, repairs, property tax, etc.) and the result is a net rental income or loss. If you have a net rental income then you pay tax on that amount, but if you have a net rental loss then you get to use $25K of that loss if income is less than $150K and the unused passive loss gets deferred to future periods.

Post: Rental property ---> No attempt to rent - Tax ramifications?

Mohamed Youssef
Posted
  • Accountant
  • Brea, CA
  • Posts 76
  • Votes 41
Quote from @Bruce M.:
Quote from @Mohamed Youssef:

 but the rental loss will be limited if you are not a "real estate professional"

What is the loss limited to, as a non professional?


I never plan to sell other than as a 1031, if that.  So my kids will get it or its exchanged replacement in the future(~10 yrs).  To me that says, I need not worry about the depreciation going to waste?  But I'm not that confident yet


 The loss is limited to $25000 only if you are adjusted gross income is $100,000 or less.

And yes, as long as you are not benefiting from these deductions then you don't have to worry about the depreciation recapture rules when you sell or exchange in the future.