All Forum Posts by: Vlad K.

Yes, just keep track of the business related mileage. Remember that you always have option to choose between actual expenses, but with prices of gas still low and mileage deduction still high @ $0.535 / mile mileage deduction will likely be more beneficial to you. 

@Mike Bereck assuming you have a functioning business - yes you can. The mileage you put on for your business is deductible. 

Nevada and Wyoming are great states to form and register an LLC.

I would recommend looking into Wyoming, as annual renewal fees are lower than Nevada at only $60 / year.

Also, remember, when you form an LLC out-of-state, you need to have a registered agent in that state. There are several companies out there who provide the service for $100-$150 / year.

Good luck!

@Aaron Vergason, from the information you have provided, nothing will change for your S-Corp.

However, here is what has to happen on your personal income tax side - VERY IMPORTANT:

 - For the year that you moved from NY to NC (2017), you will have to file 

1) New York tax return as part-year resident, and

2) North Carolina tax return as part-year resident.

3) With each return you will have to file allocation schedule to split your income by each income category (wages, interest, dividends, business income, capital gains, and so on) between both states.

Depending on your total income for the year, and whether you qualify as a "real estate professional", your rental losses may or may not be deductible. 

NEXT YEAR, you will have to continue filing in both states, but you will have to file non-resident in NY and full-year resident in NC. 

Feel free to reach out, and I can explain in more details.

@James Kojo You want to have someone who is familiar with your state's income tax laws and regulations.

What's more importantly, when you invest in multiple states, your should have a CPA who understand multi-state taxation and credits in your home and other states. Comparing to some states, CA is pretty straight-forward state as far as taxes go, believe it or not. 

Feel free to reach out if you would like to talk more.

@Michelle Eng Since the house was purchased in Oct 2016 and was always a rental property (unlike housed converted from personal residence and flips) there should be no issue claiming and proving (if needed) that it was always a rental property. With that being said, there is no time frame you should be holding it before you can sell. 

And you don't have to continue renting it until you sell, the property can be vacant. 

Hi @Terry Hall. 

It depends, but in a nutshell:

• if you have a gain on sale, you would have to recapture some or all of depreciation taken, depending on how much gain you have. 
• if you have a loss on sale, you would not have to recapture depreciation.

Adjusted basis for gain / loss calculations would have to include depreciation for the period the property was rented.

Couple more items to keep in mind:

• to exclude gain on sale of primary residence, you don't have to live there in the last two of five years. You have to live there for two years (any periods) in the last five years. 
• it is very important that you have established correct basis when you turned the property into the rental. Since you have lived in the house for some time, the basis would be lower of cost or market value on the day your have turned your house into rental property.

Hopefully this helps, but feel free to ask more questions.

Thank you @Filipe Pereira!

@Dan Weber, I would be happy to talk and help you.

@Eli K. Hi Eli. 

In a nutshell:

Any rental income (rent received) from your rental property is reduced by cash and non-cash deductions (expenses).

Cash deductions: pretty much any out-of-pocket expense related to the rental property like management fees, RE taxes paid, mortgage interest (i repeat, INTEREST PORTION ONLY), utilities, repairs, insurance, and so on. So, if you spend money on your rental property, it should be deductible, but with some caveats. Some expenditures have to be capitalized, like major improvements. 

Non-cash deductions: depreciation on your property, improvements, equipment. You take a portion of the value each year (usually over 27.5, 15, 7, 5 years) as a deduction. Depreciation does not reduce the value of your property, it only reduces your basis in the property. So, when you sell the property your gain on sale will be calculated based on adjusted basis in the property (original cost + capitalized improvements & purchases - depreciation). 

SO (in a nutshell): 

Rent received + any non-refundable deposits = Rental Income

Expenses (non-capitalized) related to the rental property + depreciation + your travel = Rental Expenses

Rental Income - Rental Expenses = Taxable Rental Income or Loss 

Depending on your situation and income level, the rental loss might or might not be deductible. If not deductible in current year, it will be carried over to future years. If when you sell the property you still have unused loss carryover, you can apply it to reduce capital gain on sale. 

Feel free to reach out with questions. I have clients who invest in rental properties in different states. 

@Matt Motil and @Dave Visaya . Hi Matt and Dave. Thank you for the welcome. Will try to stick around and learn. Might even take some action before year-end.