Tax Season!

[Juice]

who knows lots about rental property deductions?

[Juice]

and wants to give me pointers?

[Juice]

...free ones

[mac5155]

u a slum lord?

[dodint]

Last weekend was awesome. I thought I was going to owe about ~$10K in taxes for 2013. I spent a lot of hand wringing on it. Finally got my W-2 in and it turns out I'm actually getting a small return from State and Federal. Huge relief, it was probably the second most worried about thing for me last year and it was all for nothing.

[Pitt87]

If your schedule C business loses money for a certain number of years, the IRS deems it a hobby so you can't deduct the losses. How nice of them

Opportunity...

Along those lines... a buddy of mine has been trying to a buy a house every two years, live in construction, and resell it. When I ran his numbers his cash flow is positive, but he loses money each time he sells a house, though when you consider the offset of his living expenses he comes our ahead. For tax purposes, would there be any benefit to starting an LLC, calling his home and investment, renting it to himself, and capturing the losses on schedule c?

does your buddy realize he has to report that rent income ?

Just FYI, rental income goes on Schedule E.

Also - renting your house to yourself and claiming losses would be a no-no in the eyes of the IRS. I'm sure there's some loophole though - but that would need to be heavily vetted.

Schedule E is income from ownership/investments. Would you report real estate income on schedule E if you don't own the property? In this case, the LLC would be in the business of purchasing, renovating, and selling property.

[KennyTheKangaroo]

in that case, your boy would have to pay $$$ to the LLC for the right to rent the house. the corporation would have to report the rent income.

but 66 is right, its a hairbrained idea.

[60sixx]

If your schedule C business loses money for a certain number of years, the IRS deems it a hobby so you can't deduct the losses. How nice of them

Opportunity...

Along those lines... a buddy of mine has been trying to a buy a house every two years, live in construction, and resell it. When I ran his numbers his cash flow is positive, but he loses money each time he sells a house, though when you consider the offset of his living expenses he comes our ahead. For tax purposes, would there be any benefit to starting an LLC, calling his home and investment, renting it to himself, and capturing the losses on schedule c?

does your buddy realize he has to report that rent income ?

Just FYI, rental income goes on Schedule E.

Also - renting your house to yourself and claiming losses would be a no-no in the eyes of the IRS. I'm sure there's some loophole though - but that would need to be heavily vetted.

Schedule E is income from ownership/investments. Would you report real estate income on schedule E if you don't own the property? In this case, the LLC would be in the business of purchasing, renovating, and selling property.

Yes, I was just saying rental income generally goes on Sch E and not on Sch C so as not confuse folks. What you're talking about above is beyond my area of expertise, I think there's a Form 8825 for PSPs and C-Corps, but I would have thought the LLC (sole proprietor) still goes on the E. Again, not an expert. This type of stuff is probably better answered by a real estate attorney.

[ulf]

How would you have rental income if you don't own anything to rent?

[ulf]

Sounds like more trouble than its worth. The IRS is smart, if it smells fishy, it's probably because it's not allowed.

[Juice]

u a slum lord?

[Pitt87]

Yeah, I think you're right... this is 'needs paid representation' territory. Thanks for the discourse, anyway.

[shmenguin]

Again a choice you made

I think it will be cheaper for me to pay my moms monthly salary to watch our child if/when the time comes. Shmenguin not being nosey but if your wifes income is low why not just have her stay home with the kid?

who said her income was low

lol, ok so you said she makes less, not low. My bad.

but regarding your question...it makes sense, financially, for her to keep working. plus, being a stay at home mom isn't for everyone. her career is meaningful to her, and she's invested a lot of herself into what she does. it's important that she holds onto that. if she can work and our daughter can spend the day with a great sitter that we know and trust and cares about her, personally, then that's the right move.

plus, spending all day every day with a baby is a mind f***.

[tifosi77]

something disturbing just happened. i had a nice little return goin' on, with only my wife's W2 left to enter. i added it into turbo tax and my return took a nose dive. i make a lot more than her, so did she basically just get my tax rate retroactively applied to her income - which would mean she drastically under paid throughout the year and it's now time to make up for it?

if that's the case, should people with such an income disparity even be filing jointly?

Mrs Tif didn't change her deductions when we became home owners, which coincided with a change in her job. As a result, she wasn't having enough withheld from each paycheck, and we ended up with like a $12,000 tax bill. And she didn't correct the mistake until after the next tax year, so we got that nice little treat two years in a row.

[ulf]

Surely the tifs invested the extra 12k wisely that they kept away from the government during the year and came out ahead.

[tifosi77]

Mmmhmmm. Yup. That's exactly what happened.

[shafnutz05]

I thought the 3k the IRS was trying to extort from me was bad....woof, sorry tif.

[skullman80]

If you cashed in a savings bond that had accrued interest.. do you report that on 1099-T? It's a small bond that was cashed interest showing 451.60$. PNC just basically gave a receipt with transaction amount, interest and tax id(with all but last 4 numbers x'd out), when i look at a 1099-T form it looks like i need alot more info than that..

Thoughts?

Haha.. .just thought about it now, bond wasn't cashed till this month, so wouldn't need reported till next years taxes anyways.

Oh wait it matured in Dec 13 so gonna have to claim it i think.

[DelPen]

efiled in 1/27, refund will be in my account by 2/6. Not too bad

[dodint]

Still waiting for 2/15 for my investment documents to be finalized by USAA. Boo.

[mac5155]

I just e-filed about 30 minutes ago. Hoping for a quick refund. Ended up with $4800 refund.

[Idoit40fans]

Im filing today. Didnt get my w2 till today.

[skullman80]

I filed on Friday... said return was accepted blah blah blah. I've always been lucky and gotten my refund in like 7-10 days... here is hoping the same this year.

[Idoit40fans]

Just got it filed. I always get mine quickly as well, that would be great if it could happen again.

[mac5155]

My return was accepted within an hour or 2.. Come on refund.