All Forum Posts by: Tony Hoong

With the new tax reform it brought a new chance for us to defer our taxes with Opportunity Zones. With the Investing in Opportunity Act, it will allow investors to defer their taxes by re investing their money into an "opportunity zone". This is very similar to the 1031 exchange, however it allows gains on property AND stocks to be deferred for 9 years. 

Opportunity zones are designated areas of each state (which tend to be more developmental/low income areas) where the reinvestment occurs. 

The basis of the property increases 10% of your original gain at the 5 year mark, another 5% at the 7 year mark, and after 10 years the gain is capped off. 

New and exciting chances for us to defer taxes for those that invest in real estate and stocks. 

Sounds like this accountant is inexperienced and bit off more than they could chew. Raising the price in the middle of a tax return and the changing of basis. There is only one formula (with a lot of factors of course) to calculate your basis in the property. 

No new events out of the normal course of business happened from 2016 and 2017 it sounds like either so you should be in the same refund range. You sound like you have a strong calculation and a grip on your taxes. It would be a better idea to use your own vs this accountant's.

Hi Jack,

How does your calculation compare to his? Seems like there is a large difference. As for the tax refund amount, were there any events in 2017 that were difference than 2016 that would cause a difference. Lastly, for the payment of 700 was there a contract in place?

1. An encapsulated crawl space would leans more towards an improvement and would be capitalized on top of the value of your property. 

2. Refrigerators fall under appliances and can be depreciated over 5 years if you use the general system

Was this a rental property? Just curious since it sounds like there were multiple people in on the property. Let's hope your answer is no :)

https://www.irs.gov/publications/p523/ar02.html#en_US_2015_publink100010381

@Austin Willman you hit it right on the head

@Austin Willman I am a CPA and the classic accountant answer is it depends. The answer mostly hinges on if there is a large amount of flipping going or if its just rental income. A general rule of thumb would be if you are flipping it would be better off to file as an S corp. Rental income head towards the LLC route.

You are correct on file as an s corp and pay yourself a reasonable salary and if you want to pay out dividends you can or keep the money within the S corp.

Hey Thomas,

If you primary activity is collecting rent then you should go with a LLC. You are only flipping 1-2 times per year right?

Awesome to see you live in Minneapolis! I used to work in Minneapolis as a tax accountant. If the 10K is into the unit you are living in and not the rental portion, you won't be able to deduct those expenses. What were the expenses made up of? If anything of it is related to central air, plumbing, or anything that goes with the other unit you will be able to take 50% of those as expenses. The roof count as 50%. Like @Natalie Kolodij said, you can capitalize or write it off. But since you have so many expenses this year, its in your better interest to write it off. 

All expenses for the unit that is rented out can be written off. 

Hey Thomas,

If you need to file an 1120 it is due March 15 and you can extend it for 6 months if you file an extension. Then you will have until September 15. It looks like this question is a little bit old, but hey the upcoming year is due! Feel free to ask me more. I am a CPA and am looking to help anyone out!