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Real Estate

Real Estate Investing Tax Strategies

By Greg Freyman, CPA and Angela Freyman, MBA

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world”
~ Franklin D. Roosevelt

There are so many fascinating aspects to real estate. In this edition we will briefly go over important information on financial and tax topics of real estate as personal and investment use.

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19 / 05 / 2015 by Greg Freyman, CPA in Business Tax

Real Estate Tax Reporting For Single Member LLCs

Question:
If a real estate partnership has a partner that is a single member LLC, and the LLC has an EIN, should the K-1 be reported on Schedule E page 1 of our Form 1040? Should we simply use the ending P&L rate to reflect the income on the schedule E page 1, or just pick up the income on the 1040 schedule E page 2?

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17 / 02 / 2015 by Greg Freyman, CPA in Business Tax

Tax Rules For Deducting Real Estate Losses

There are many different types of real estate professionals in the market. Some do it for a living, while others manage one or two properties for supplemental income. The business tax deduction rules vary greatly depending on how you are classified as a real estate investor as detailed in IRS Publication 925.

To qualify as a real estate professional for tax purposes, you need to meet the following requirements:

  • More than 50% of your professional services are provided in the real estate field
  • You spend more than 750 hours each year in managing a real estate business
  • You are not an employee of the business (unless you own at least 5% of the business)
  • You must also materially participate in the rental activity

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