All Forum Posts by: Jake Hottenrott

 and $500K if Married 

@Account Closed - So if the seller did the cash out refi, you might end up in the situation above where the sale triggers the due on sale clause in the mortgage.  I can answer the $0 gain question though.   The financing piece isn't a taxable event in and of itself so while I follow the logic, you would still pay a gain.

Here's a quick example:

Home bought for $100,000 in 1987 with an $80K mortgage.  The basis in the home is $100K.

2017 -  Original Mortgage is paid off, owner wants to sell, but takes cash out of the home now worth $500K.

Home value = $500K.  Cash out $400K.  Mortgage $400K. 

If the owner decides to sell, the parts related to the sale are the price paid in 2017 to sell the home of $500K less the basis of $100K which gives us a cap gain of $400K. 

I know its not a great example, but if it's confusing, just ask and I'll try to explain more.

@Justin Palamara - You may want to search around here on the forums to find good CPAs or Tax Strategists.  There are a few active users whose style you might like and will provide exactly what you are looking for.  

If I were you, I'd reach out to @Natalie Kolodij to see if she's open to new clients and if she had time for a quick consult. 

Best of luck!

@Bryan Hudspeth - I think most people are properly steering you to WHERE to file the LLC paperwork. I'd like to also give a self serving plug to the "if" you should do it prior to your first deal and when you should file that LLC.

Here's a blog post I wrote a while back  https://www.biggerpockets.com/blogs/5926/53215-questions-as-common-as-the-cold---llc

Wholesale? Buy and hold?  

If the latter, let them hold the note.  Then they can earn interest and use the installment sale method to slowly realize the capital gains as they get paid.

@Bernie Huckestein - The problem with finding people doing this type of work and looking for area specific referrals is that many CPAs, EAs, etc that specialize in real estate and have knowledge in this aren't typically found in your backyard.

I'd look around on this website and see who pops up and makes sense in their strategy and commentary.  Have a phone  conversation and check out how responsive they are.  Many of the advisors you will find on this site are better prepared, more focused on Real Estate and will actively work with you.

I understand the comfort level of having someone local that you can drop in to see, but most of the time a phone conversation or an email is what really suits the bill.  

Best of luck!  

@Barshay Graves - it depends on what you are planning on doing in the entity.  What's the business activity?

@Myka Artis - Feel free, I'm always happy to chat and help.

@Myka Artis - You should receive a 1099-K if you exceed both $20,000 of earnings and 200 stays in a year.  Airbnb won't send out a 1099 for amounts under that, but it is still the hosts responsibility to pull the earnings report and use that to report your income on your taxes.  Please let me know if you have any more questions!

@Candace Wiley - While you will not have to file a separate return for the vacation rental, you will have to include it on either Schedule E or Schedule C of your personal return depending on a few factors and the circumstances revolving around the services provided to your tenants.  

There are a lot of great CPAs on this site who invest (in a variety of ways) and are active.  If you'd like to ask more questions, feel free to post them here or shoot me a message and we can set up a time to talk.  I'm always happy to help as we ventured into the AirBnB hosting world too this year.  Best of luck!