Articles
2021 Year-End Tax Strategies
As the year comes to a close it’s a good idea to review your tax position and determine if you can make any last-minute moves to reduce income tax. In this article, we’ve broken out year-end strategies for you to consider during the final weeks of December. Note that these strategies should generally be implemented…
Read Full ArticleWhat Closing Costs are Deductible?
There are many closing costs associated with purchasing rental real estate. These closing costs are reported on your Closing Disclosure and, for tax purposes, are treated as one of the following: Currently deductible cost Cost added to the “loan basis” and amortized over the life of the loan Cost added to the “building basis” and…
Read Full ArticleShould You Invest in Real Estate Syndicates & Funds as an Individual or Through an LLC?
From time to time we get asked about the advantages and disadvantages of investing in real estate syndicates and funds as an individual vs. an LLC. In this article, we’ll discuss the advantages and disadvantages of investing in each primarily from a tax perspective, and we’ll touch on other aspects from a more general perspective.…
Read Full ArticleDoes the Proposed Bill Spell Bad News for Self-Directed IRA Investors?
If you’ve been a Tax Smart Investor for a while, you know there are pending legislative changes coming our way – and so far it’s not looking very favorable for real estate investors. The latest iteration released on September 13th included a surprise that would have negative consequences for those who invest in syndicates, funds,…
Read Full Article2021 Vehicle Purchase Deductions for Landlords
Do you need a new business vehicle? Perhaps one that you can lug rehab materials around in or drive to your rentals? And do you need tax deductions this year? Real estate investors who are running a trade or business (most landlords are) can claim a deduction for purchasing a new or used vehicle. And…
Read Full ArticleFAQs by Real Estate Investors About the Tax Treatment Cryptocurrency
I know what you’re thinking… “Aren’t you guys real estate CPAs? Why post about cryptocurrency?” Well as you know real estate investors are first and foremost, investors. And of course, many investors are dabbling in cryptocurrency these days and have a lot of tax related questions. Thus here we are and in this article we…
Read Full ArticleAre ATM Investments Passive or Non-Passive?
A couple of months ago, a client approached us at The Real Estate CPA (our tax firm) and was excited to tell us about this new investment opportunity that would eliminate their tax bill. They explained it as being similar to a real estate syndication in that they invest some amount of money and, in…
Read Full ArticleInvestors: How to Guesstimate Tax Losses You’ll Get from a Syndicate
Real estate syndications are on the rise and they are appealing because they offer great returns with the promise of no work. For the uninitiated, a syndicate is a structure where a couple of people (the “sponsors”) will find a large real estate deal and raise money from investors to buy the real estate. This…
Read Full ArticleWhat Does ‘Material Participation’ Mean?
When a real estate investor becomes a landlord, they often look into tax breaks associated with owning rental property. There are many tax breaks associated with owning rental real estate. Ordinary expenses like insurance, property taxes, and repairs can be deducted in the same year incurred. Larger improvements are “capitalized” and “depreciated” over a long…
Read Full ArticleHow to Interpret Form K-1 (And Apply the Passive Activity Rules)
You invested in a syndication, fund, or decide to go into business with a friend. An LLC is formed and all activity for the partnership is reported on Form 1065. You are then sent a Form K-1 reporting your share of the partnership’s activity. How do you know the Form is accurate? And how do…
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