All Forum Posts by: Sean H.

I understand the rough idea of how bonus depreciation is relegated. If we are talking in rough terms, if you minus out the land, foundation, and frame. You might be left with about 25% of the home's purchase price you can bonus depreciate. But im just talking about that 25%. Assuming i did a cost anaysis, and came out with a final number of depreciating assets. Im just talking about the depreciation recapture on these items that i used the bonus depreciation on after a demolition.

Quote from @Michael Plaks:

@Sean H.

I do not recommend that you DIY taxes. You clearly listened/read enough tax information to make yourself confused. You use various tax terms but not correctly and without understanding the big picture. It's like trying to use the excavator from your profile picture without learning how to operate it. Why, let's just see what this lever does, shall we?

You don't claim bonus depreciation on the property. You might be able to use bonus depreciation on some specific components of this property: carpet, appliances, driveway, fence and so on. If you later demo the property, you do not recapture bonus depreciation on these items. Demolition has its special tax treatment however, and I would not tackle it without profession guidance.

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I just bought a property i was planning to rent it until i have time to get to it. My long term plan is just to rent it for a couple years, and then tear it down. If i claim bonus depreciation on it this year or next, does the depreciation recapture get reset on the bonus depreciation (since it does not include land value) after i tear it down? Listening to an accountant speak a couple years ago, i was told that when you get a new roof or new appliances, that essentially resets the recapture when bonus depreciation is taken.

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I do my own flips and builds, but ive been taking on a few side jobs since the market has been slowing. Im licensed GC, but i only do work in durham (not south durham). I prefer big stuff - gut remodels, additions, or building ADUs.

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Raleigh, North Carolina

ok, thanks!

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Im already educated on the proper ratio of wages to be taken out per my total income. Im just trying to figure out if those distributions are taxed in the standard federal progressive tax bracket (up to 37%) or the distribution tax bracket which seems to be similar to the long term cap. gains rates.

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Originally posted by @Ashish Acharya:

Originally posted by @Sean H.:

What taxes are dividends subject to (not talking about wages i pay myself)?

I believe FICA is exempt? Is it just the dividend tax rate of 0/15/20%, or there any additional taxes this money is taxed?

For state, is it just the state income tax or is there a different rate as well?

There is no dividend from S-corp. It's called distribution. Distribution is not taxed if you have a stock basis.

You might be asking about the net income (after you pay yourself). It is taxed at a normal ordinary income tax rate. You pay taxes on the net income, not the distribution.

With the new tax law, net income will be taxed an extra 3.8%. This is very new and we all are trying to digest it.

So, youre saying net income is total income minus wages?

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did you get a better deal than that? For that price is seems pretty high.

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I have a lot of land, and started to research it. But i havent found a lot of info about who buys. Is it done through brokers?

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I saw something recently where the CARES act added in last year that an employer can contribute up to 5,250 each year until 2025 towards student loans, and the money becomes a full write off. My company is just me and partner, with no "employees."

I am already aware that i can contribute to a solo 401k as an employee and employer. But, wasn't sure with other contributions i can play the duality as well.

Does this also work with health insurance copay?

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All Forum Posts by: Sean H.

Sean H. has started 44 posts and replied 206 times.

Post: Bonus depreciation - depreciation recapture after demolition?

Post: Bonus depreciation - depreciation recapture after demolition?

Post: Out of state investor help. What do I do? Durham area

Post: S-corp - dividend taxes ?

Post: S-corp - dividend taxes ?

Post: S-corp - dividend taxes ?

Post: S-corp - dividend taxes ?

Post: Very 1st Wholesale Deal

Post: Anyone getting carbon credits for their land?

Post: Full 1099 w/ S-Corp, do all employer contributions apply for me?