All Forum Posts by: Nathan H.

@Nathan H.

Got it. 

I’m just suggesting getting tax advice from randoms on BP presents potential issues. 

I would not go online to get medical or legal advice from randoms. 

How does one determine whether the info provided by randoms is accurate?

Lots of misinformation appears on BP. 

@Nathan H.

Please don’t be penny wise and pound foolish.

Hire a tax professional.

The cost will be tax deductible. 😀

Nathan -

It's understandable that you want to optimize your tax situation by strategically utilizing your capital losses. Here's how the treatment of capital losses typically works:

1. Netting Capital Gains and Losses in a Tax Year: In a given tax year, you first net your capital gains and losses. This means you subtract your total capital losses from your total capital gains. If your losses exceed your gains, you have a net capital loss for the year.
2. Offsetting Other Income: If your net capital losses exceed your capital gains, you can use the excess losses to offset other types of income, such as ordinary income from wages, self-employment income, or interest income. This can reduce your taxable income for the year.
3. Carrying Forward Unused Losses: If your total capital losses exceed your total capital gains plus the allowable deduction against other income (currently up to $3,000 for individuals or $6,000 for married couples filing jointly), you can carry forward the unused portion of your capital losses to future tax years.

Regarding your question about deferring capital losses into 2023 and using them to offset capital gains in that year, yes, you can typically carry forward unused capital losses from previous years and use them in future years, even if you had capital gains in those previous years.

So, if you choose not to use all of your capital losses from 2022 to offset your income in that year, you can carry forward the remaining losses to 2023 and use them to offset capital gains you expect to have in that year.

@Nathan H.,

You have two options after a 1031 exchange.  You'll want to work with your accountant on this. 

Option 1: Separate Schedules

Carryover: Continue depreciating the remaining cost basis from the relinquished property over its original depreciation schedule (e.g., 17.5 years remaining for residential property).
New Schedule: Simultaneously, start a new depreciation schedule for the additional cost basis attributed to the replacement property, following standard timeframes (27.5 years for residential, 39 years for commercial).

Option 2: Treat as New Asset

Combined Basis: Treat the entire cost basis of the replacement property (carried-over basis + additional funds invested) as if it were a newly acquired asset.
Single Schedule: Depreciate the total cost basis over the standard timeframe for the replacement property type (27.5 years for residential or 39 years for commercial).

If you choose option #2, you need to file an additional form (4652) with your tax return. 

 To use those products have to be able to go full doc . Bank Statement program will be best to acquire the property and just refinance to better terms when your financial scenario changes . The rates are only about a 1% difference 

 It can be done, but it is tricky:  https://selling-guide.fanniemae.com/Underwriting-Borrowers/I... 

 Your rental income (does not matter if long term or short term) of your schedule E is calculated using this form: https://content.enactmi.com/documents/calculators/Form1038.C...

Your schedule C income will be averaged over the last two filed taxes returns. So, if 2023 was better then 2021 go ahead and het 2023 filed. 

The W-2 if not current will come into play at all.