All Forum Posts by: Robert Hetrick

I took a Cares Act 401(k) distribution this year, and am wondering about options to split the income. I know the IRS says I can pay the tax all in the first year, or "ratably over 3 years." 

Right or wrong, I'm of the opinion that my tax burden would go up in the coming years if Biden repeals Trumps tax plan.   I see very little chance of it going down.

If I claim the full amount of the distribution in the first year, it will definitely bump me into the next tax bracket by a significant amount - so I'll pay a higher rate on a little less than half of the distribution.

If I can split the distribution over two years instead of three, it will keep me in the same tax bracket this year, while minimizing the amount subject to potentially higher tax rates if the tax structure changes next year.

So that's the question:  Can I split the distribution income over two years instead of three?

Thanks in advance,

Rob

Thank you!

Hi BP,

Quick question for ya'll.  I'm considering a 401(k) loan to buy some investment property.  My question has to do with how the tax and penalty is calculated should I quit or lose my job - I have no expectation that this will happen, I just want to make sure I understand the ramifications before I pull the trigger.

My question is this:

Say I take a 5 year loan.  Then assume I quit/lose job after 3 years.  Is the tax and penalty that will be due based on the ORIGINAL amount of the loan, or only the OUTSTANDING balance of the loan at the time I leave?

Thanks in advance!

Rob

Just to close the loop, it's been sorted out by the PM's corporate accounting group.  When the second payment was entered, they mis-coded it.  It's all balance correctly now and they're sending me the balance due.

Thanks again,

Rob  

Thanks for the input Mike.

This is a large PM company in the Southeast with thousands of doors under management.  I can't imagine I'm the first one to question this if it's a system-wide setting.  Perhaps it is just a setting on my individual account.  I've got a call in to the corporate accounting office to find out...

Rob

HI BP,

Another question from a newbie:

I have a property that the lease expired at the end of last month, 3/31.   It is a Section 8 property, about 65% of the rent is paid by the gov't.

When I received my owner statement a few days ago (4/10), I was surprised to see no rent collected in April, not even the gov't portion, only the monthly PM fee.   I was prepared to see the tenant portion reduced or missing, but not the gov't portion.

I've asked the PM for an explanation but they haven't responded yet.  My assumption right now is that the tenant moved out at the end of their lease.

If that is the case, I would have expected a notification from the PM that they were leaving.

I thought maybe they just left without telling the PM, but if that was the case, wouldn't the gov't portion still come? Maybe the tenant told HUD they were leaving and HUD didn't inform my PM?

Thoughts from anyone?

Thanks in advance,

Rob

Thanks for the reply Kim!

Both payments were applied to the account on the same day - 3/13.   It wasn't actually late, I just got bought the house at the end of February and there was a mix-up as to where March rent was supposed to go.

Also, this happened in March, and in April, the tenant paid $600 and $400 (correct total), and the "pre-paid" rent carried through...

Thanks again,

Rob

Hi BP,

I've got another question as a fairly new owner.  I have one property where the following happened last month.  

In round numbers:

Rent:  $1000

Tenant paid in two payments:  $600, and $405   -  $5 extra.

The property manager is classifying the entire second payment as "pre-paid rent" because the total paid exceeds the amount due, and therefore only credited me $600.

I can absolutely understand keeping the extra $5 to carry over to next month, but to keep the whole payment seems wrong.

Anyone else experience this with their PM?

Thanks in advance,

Rob

Thanks Jacob and Evan!

My three houses are all different markets, and all out of state - that's the reason for the different PM's.

The third PM that has been great so far, also has a different office in #2's city where I'm having the problems.  I'm thinking about switching to that company, but my concern is two-fold - I've only been with them less than a month now, so I don't know how good they'll be long term, and secondly, there's no guarantee that the other office staff will be as good as #3.

Thanks again!

Rob

Hello BP,

I'm a new investor, bought my first IP in November last year, bought another one in December, and my third one in February.

Two of the three property managers have been good, emails or phone calls usually answered within 24 hours, 48 at most.

The PM for the property I bought in December has been a different story.  Sometimes I don't get a response for over a week.  However, if they need something from me, they always want a response quickly.

This last one involved some repairs on the house, they wanted my approval quickly, which I provided within an hour. on Feb 24.  At the end of February, I got the monthly statement from them that had some confusing things that I wanted to clarify.  Called them, no response.  Called them again this past Tuesday, still no response.

It leaves me wondering if they're this slow responding to tenant concerns-not good for retaining tenant.

The current lease ends at the end of March.  I don't have any information from them if or when they've tried to get a new lease.

They have a 100% satisfaction guarantee, I can get out of the PM contract at any time with 30 days notice with no penalty.  Would you go this route?  How would a tenant perceive a switch in PM 3 months?   

What would you do?  Am I expecting too much from a PM?

Thanks in advance!

Rob