Archive for the ‘Tip Of The Day’ Category

Will You Get a Form 1099-C?

If you walk away from real estate with a foreclosure or deed-in-lieu of foreclosure, you may or may not get some forms from the lenders. You are most likely going to receive a Form 1099-A which will report the amount you owe, whether the loan is recourse to you or not and a fair market ...

The Latest On Real Estate Professionals vs IRS

Taking a Real Estate Professional deduction on your tax return can mean big tax savings. But there are definite rules to taking this deduction. Please go back through previous tax tips on this site to look at what it takes to take this deduction. And make sure you consult with a tax professional regarding your ...

The Definition of a Real Estate Professional

Back when everybody was investing in real estate, prices got out of control and the rental market dried up. That meant a lot of people had negative cash flow. In other words, every month they had to put extra money into the deal. One day a professional couple, highly educated, hired me as their CPA. ...

The Smart Real Estate Depreciation Deduction

This is the real tax loophole for real estate investors. Depreciation is a phantom expense. It doesn’t cost you any cash, but you get a deduction. It doesn’t get much better than that. First thing to determine before you start maximizing depreciation is to calculate whether you should. If you already have a loss or ...

General Real Estate Deductions

Every active investment or business will have general expenses for management, home office, travel, etc. The question here is where there really is a real estate deduction. In order to take a deduction, the expense must be ‘ordinary’ and ‘necessary’ for the business. One of the accounting & tax challenges for the real estate investor ...

Repair or Improvement for Your Real Estate Property?

You just spent money fixing up your property. Is it a real estate deduction you can take right now or is it something that you need capitalize and then depreciate over time? My favorite answer:  “It depends.” The reason this is so confusing is because there is some confusing guidance by the time you sort ...

Are You Getting All Your Real Estate Deductions?

There are three types of real estate deductions you need to track for your business. Today, we’re going to talk about the most common:  Property expenses. Check back over the next few weeks for the rest of the real estate deduction categories. Property expenses. These are the easiest to track. Property expenses are the costs ...

Understand Real Estate Like Kind Exchanges

A Section 1031 is also known as a like kind exchange. If you have a property that has gone up in value and/or been depreciated for a number of years, you are going to have gain when you sell.  You may not want to pay tax on all of that right now. That’s where the ...

Choose Your Favorite Depreciation Method with a Like Kind Exchange

If you do a like kind exchange for real property or personal property, you have a choice when it comes to depreciation of the remaining basis. You can either depreciate the property using the old depreciation method (from the previous property) or the current depreciation method that is in forcé when you buy the property. ...