All Forum Posts by: Reid Isaki

Perhaps I'm confused as well but let me add more details to my scenario. I am deferring the gain through the 1031 exchange but was also looking to accumulate losses/expenses to offset gains (rent) on other properties.  I have one paid off so without expenses, write offs and deductions, I'll soon pay tax on those gains.  This is the main reason why if i can carry losses i would try to do so.  

I'm confused why you would think I'm not deferring the gain indefinitely.  The proceeds from the sale are copacetic with the irs since it's paying for mostly the commissions and title fee's.  

i don't plan on getting any money to my name personally, but will use a Qi and exchange escrow to handle the proceeds of the sale.  I love numbers so I'm trying to learn the rules for taxation in this respect

love your feedback and really appreciate all the comments!! It's starting to feel like i can't use the expense of commissions as a deduction towards my pool of profits on my schedule e.  Wanted to confirm that in particular

https://budgeting.thenest.com/...

looks like i can't do it the way i thought, I'll only be able to reduce the gain that's taxable but my strategy was to leave my property to my heirs so all this depreciation recapture and tax deferred profits won't really mean anything in the end when i die and my heirs inherit.

Thanks for your reply, let's say the main costs are buyers commission of 33,000 and sellers commission of 11,000. Feels weird to be getting taxed on something that I'm paying for but am i understanding this correctly, i would get taxed on these things because I'll be using the proceeds from the sale of the investment.  I think i understand what you mean but wanted to confirm. My qi will be able to help with this accounting? Or is this an unusual request?

thanks,

reid

aww yes that makes sense. I'll ask my Qi.. i dont' plan on selling this next property ever so i'm not worried about taxable gains. a 1031 exchange should signify that i'm not going to be taxed on any gains since its' a like kind exchange. I was hoping that i could use some of these closing costs to add to  my losses  on my schedule e.  if it lowers my taxable gain then it doesn;t benefit me at all.  or ami i missing something? i dont think anything would offset my other property taxes, only my schedule e losses is what im shooting for...

thank you!

appreciate the reply, but really trying to not get any "please consult your tax CPA for what to do".. That is always an option.  Curious if anyone has anything more substantial to add. i know the 1031 rules, i am more interested in what can you deduct when selling rental property when you have other rentals you can deduct losses against.  Perhaps I shoudl have renamed this title.  not sure if a 1031 exchange changes any losses from a investment property. 

I own 3 rental properties and am doing a1031 exchange on one. What closing costs can i deduct from this exchange? I want to keep accumulating carry over losses but am having trouble finding information about this.

everything i read about is what i can deduct when i purchase an investment property, not what i can deduct when selling.

is there nothing i can deduct from selling since i won't open that property anymore even though i have other rentals and try to pool all the losses together?

thank you

Curious if i bought a rental in 2000 rented it for 5 years, then converted it back to primary and lived in it for 5 years(2010) and then rented it again how would you calculate depreciation? Does the 27.5 years reset in 2010 or in 2010 would i have 22.5 years left to depreciate the property?  It's it possible to convert rental to primary back to rental?

thanks!!

awesome thank you guys. To me there is only really one way out of not paying any depreciation recapture and that is death lol.  If i leave my home to my heirs and passaway with it in my possession they dont' pay any depreciation recapture OR capital gains tax, whatever the property is worth at the time of my death is the new basis for my heirs.

After searching the internet for 1031 exchange information(everyone seems to copy the same block of text from each other which adds to noise), I wasn't using the correct terminology. There are exchange excrows(the escrow company that will handle the proceeds of a 1031 exchange and use that money to purchase the like kindproperty) then there are exchange accomodators who will handle the paperwork of the sale/purchase.   Also there are the 1031 advisors who basically are there just to give you advice but won't actually do anything to help you or facilitate any of the sale. Please let me know if what I have is incorrect.

I know the gist of 45 day identification period and 180 day close, and 200% rule etc.. but when it comes down to the guts of actually doing a 1031 exchange I had a very hard time getting into the nuts and bolts of it.  Probably should have posted something in BP originally . Thanks everyone again for your help!!   

@John Warren thank you for your reply! If I am missing something, depreciating something is never as good as writing it off as a repair, since even if you don't "use" all of your expenses to offset your gains it will roll over to the next year(s) and can continue to use that. I'm non active in my participation with rental activities.  I can only atest to my situation.  But yes, that's what I needed to know, everything that i'm depreciating against my property will be subject to depreciation recapture.  Even though I sought out a highly recommended yelp real estate tax cpa, I found that I was more knowledgeable in the current real estate tax laws(they are changing every month in california).  He was knowledgeable in the overall way of things that haven't changed for decades.  

If i depreciate appliances does this go into my basis and increase my depreciation recapture when i sell the unit

ie if i buya property worth 100k and depreciate it over it's life and then sell the property does the appliance depreciation add into this recapture calculation or is it strictly the building depreciation that I'll have to pay on?

I see tons of the same examples on depreciation recapture. My question is if i replace an appliance and depreciate it over 5 years does this need to be calculated into my depreciation recapture if i sell the property 30 years from now? All examples I've seen show that the irs will be assuming I'm taking depreciation on my property whether i take it or not.

if i replace windows, roof, flooring etc these expenses all add to the depreciation recapture I'll have to pay when i sell right? I am confused if the property is work 100k not land only building, and we depreciate it over 27.5 years that number will be a constant as I've seen in 200 examples. But if we depreciate improvements then that yearly depreciated value should be different every year and then the amount of depreciation recapture will be much bigger when you sell.

thanks??