trump tax bill & landlord (by matt [TX]) Dec 26, 2017 9:30 PM|
trump tax bill & landlord (by cjo'h [CT]) Dec 27, 2017 12:20 AM
trump tax bill & landlord (by myob [GA]) Dec 27, 2017 4:12 AM
trump tax bill & landlord (by LindaJ [NY]) Dec 27, 2017 4:32 AM
trump tax bill & landlord (by S i d [MO]) Dec 27, 2017 4:50 AM
trump tax bill & landlord (by Emily [TX]) Dec 27, 2017 5:48 AM
trump tax bill & landlord (by AllyM [NJ]) Dec 27, 2017 6:40 AM
trump tax bill & landlord (by Marv [IL]) Dec 27, 2017 7:29 AM
trump tax bill & landlord (by Robert J [CA]) Dec 27, 2017 8:29 AM
trump tax bill & landlord (by myob [GA]) Dec 27, 2017 8:53 AM
trump tax bill & landlord (by Coplin [CA]) Dec 27, 2017 9:16 AM
trump tax bill & landlord (by Tom [FL]) Dec 27, 2017 9:22 AM
trump tax bill & landlord (by NC INVESTOR [NC]) Dec 27, 2017 9:38 AM
trump tax bill & landlord (by TA [CA]) Dec 27, 2017 10:19 AM
trump tax bill & landlord (by Robin [WI]) Dec 27, 2017 11:00 AM
trump tax bill & landlord (by Chris [CT]) Dec 27, 2017 11:37 AM
trump tax bill & landlord (by NC INVESTOR [NC]) Dec 27, 2017 1:07 PM
trump tax bill & landlord (by NE [PA]) Dec 27, 2017 2:19 PM
trump tax bill & landlord (by Marv [IL]) Dec 27, 2017 2:21 PM
trump tax bill & landlord (by NE [PA]) Dec 27, 2017 2:22 PM
trump tax bill & landlord (by Landlord ofthe Flies [TX]) Dec 27, 2017 3:32 PM
trump tax bill & landlord (by NC INVESTOR [NC]) Dec 27, 2017 4:09 PM
trump tax bill & landlord (by Marv [IL]) Dec 28, 2017 5:47 AM
trump tax bill & landlord (by WMH [NC]) Dec 28, 2017 6:21 AM
trump tax bill & landlord (by Marv [IL]) Dec 28, 2017 8:07 AM
trump tax bill & landlord (by John... [MI]) Dec 28, 2017 8:18 AM
trump tax bill & landlord (by NC INVESTOR [NC]) Dec 28, 2017 9:44 AM
trump tax bill & landlord (by Marv [IL]) Dec 28, 2017 1:17 PM
trump tax bill & landlord (by Marv [IL]) Dec 28, 2017 1:19 PM
trump tax bill & landlord (by John... [MI]) Dec 29, 2017 8:29 AM
trump tax bill & landlord (by Coplin [CA]) Dec 29, 2017 2:09 PM
trump tax bill & landlord (by Marv [IL]) Jan 2, 2018 5:56 AM
trump tax bill & landlord (by Jeffrey [VA]) Jan 3, 2018 5:38 AM
trump tax bill & landlord (by NC INVESTOR [NC]) Jan 4, 2018 1:28 PM
trump tax bill & landlord (by Marv [IL]) Jan 7, 2018 7:47 AM
trump tax bill & landlord (by matt [TX]) Posted on: Dec 26, 2017 9:30 PM
I followed some news about trump tax bill. it allows pass-through tax rate of 20% for LLC and S-corp. It even allows it for schedule-K. But I don't find anything about schedule-E for pass through rate at 20%.
assuming your tax bracket is above 20%, shouldn't landlords start setting up LLC's to take advantage of the new tax rate of 20%?
trump tax bill & landlord (by cjo'h [CT]) Posted on: Dec 27, 2017 12:20 AM
Matt, I have an accountant well versed in rental property.I wouldn't dare do anything like that on my own.Dump a load of lumber in the yard,and two weeks later I'll have a house,all ready for the electrician and plumbers.The do-do bird in fifth Avenue and Miro lago I wouldn't trust him as far as I could throw him,which is not very far,he's a big sod.you couldn't trust him,after gipping all those people three times,once I could see,but three times? No way.......................charlie...................................................the poor man is sick,very sick........................................ --174.199.xx.xx
trump tax bill & landlord (by myob [GA]) Posted on: Dec 27, 2017 4:12 AM
matt TX I would agree with only one part of CT rage-- wait for the dust to settle. Study on it - read on it.
cjo'h after 8 years of do-do bird in White House we need to give our current man more than a year to straighten out EVERYTHING thats been screwed up. He's done much in 1 year. He has attained what we here as LL's always look for-- RESPECT- can you make everyone happy-- not on your life but he's working on it.
His big problem as I see it -- is his constant verbage about putting people back to work again-- Mr. President what makes you think people want work-- we all know it's hand outs that are keeping people down. why work when you can get more with a check in the mail from UNCLE SAM?
When Isee freon 22 and regular light blbs back on the market we're home free. (global warming from light bulbs-- do do bird alright!) --99.103.xxx.xxx
trump tax bill & landlord (by LindaJ [NY]) Posted on: Dec 27, 2017 4:32 AM
Those light bulbs have put out just enough heat to keep some pipes from freezing for years for me. Right now it is -12 degrees where I am, I don't have a problem with global warming.
I also say to let the dust settle, the irs has to interpret some of these things and you need to look at your specific situation. Unfortunately, I don't think this bill is enough to put the tax people out of business. --96.236.xx.xx
trump tax bill & landlord (by S i d [MO]) Posted on: Dec 27, 2017 4:50 AM
One should avoid making long-term business decisions based solely on laws that can change with the stroke of a pen. Yes, LLCs look to gain some tax benefits, and as all of my properties are already in an LLC that may help me. But I did an LLC for other reasons. This will be icing on the cake, not the cake itself. There are rules for LLCs that might, depending on your state laws, make it more costly or burdensome to have an LLC even with a substantial tax benefit. Consult with your CPA and attorney before making any decisions.
Congresses change, as do presidents. This whole bill was passed on straight party line vote. Mid-term elections are just around the corner. We could soon have a different line up voting in new changes. --173.19.xx.xxx
trump tax bill & landlord (by Emily [TX]) Posted on: Dec 27, 2017 5:48 AM
An interesting idea; I agree with seeing what shakes out with respect to technical corrections and actual implementation of the new law.
Years ago it was common in TX for companies to organize as a limited partnership with a 1% general partner in TX and a 99% limited partner in another state, usually Nevada or Delaware, to avoid state income taxes. Then TX changed their law to close that loophole so many companies dissolved these partnerships. Businesses are constantly adjusting to take advantage of these types of things and then adjusting again as laws change. It's a matter of evaluating the cost/benefit of doing so. --155.201.xx.xxx
trump tax bill & landlord (by AllyM [NJ]) Posted on: Dec 27, 2017 6:40 AM
I am just thrilled that my stock based 401K is going up ten percent every quarter due to the confidence our President inspires. I won't mention the firm it is with since I got a nice phishing email asking for my passwords to the account after I posted it the last time. Only mentioned it two places and the other was my Facebook page. Somebody got my email address and sent me an elaborate phishing email pretending to be the investment firm. Nice try. --73.33.xxx.xxx
trump tax bill & landlord (by Marv [IL]) Posted on: Dec 27, 2017 7:29 AM
There will be lots of regulations coming out this year to explain the new law. It's my understanding that only Business' will benefit from the 20% pass through. That is, Sch C, 1120, 1120s, 1065, 1041 businesses. Not Investment property like rentals on Sch E. I'm sure that any of these entities with rental properties in them will not qualify for 20% deduction. --173.15.xx.xxx
trump tax bill & landlord (by Robert J [CA]) Posted on: Dec 27, 2017 8:29 AM
When I first owned income property back in 1978, the depreciation schedule was only 15 years long. Then it changed to 27.5 years taking almost twice as long to write things off.
Now with the purposed new tax laws, once again investors need to be more creative to show a profit! --47.156.xx.xx
trump tax bill & landlord (by myob [GA]) Posted on: Dec 27, 2017 8:53 AM
Robert CA why would I want to show profit?
I'VE HEARD this is one of the best CASH BUSINESS' TO GET INTO? --99.103.xxx.xxx
trump tax bill & landlord (by Coplin [CA]) Posted on: Dec 27, 2017 9:16 AM
I disagree with many of the above posters.
I've searched the internet & got several CPAs opinions as well as law professors analysis & other accounting service opinions, all saying individual rental real estate reported on Sch E qualifies for the 20% reduction on total rental net profit.
Some of the sources are:
Individual Tax Planning Under The Tax Cuts And Jobs Act Of 2017
Thomson Reuters Tax & accounting News
Evergreen Small Business
Selden Gox CPA
Law Professors from Michigan Law School,NYU School of Law, & about 14 other tax scholars,practitioners, and analysts.
So I conclude individuals will get the pass thru benefit.
When filing time comes I expect my CPA will have the application details.
trump tax bill & landlord (by Tom [FL]) Posted on: Dec 27, 2017 9:22 AM
It's extremely sad how many regulations the previous admin placed on businesses. I really don't know how businesses functioned over the 8 years of the last admin. The best tax option would be the flat tax or fair tax of a flat rate of 23%. However to do this there would have to be changes to two constitutional amendments AND the IRS would be history. Unfortunately this most likely will not happen but theres always hope for it too happen. With a Fair Tax money can exchange hands under the table; handyman work, rental payments, etc. When the person buys a products that are taxes 23% they will pay the fair tax of 23% with no other added taxes. Of course real estates taxes will be gone too.
Allym of NJ, be extremely careful with the information you put on facebook it can become an issue for you in the future. That can be said for any website on the Web.
Look at the history of social security and how over the years its not the best solution for retirement. BY the way it was never meant to be a depend all for a retirement fund. The last 6 years our health care is going in the same direction as social security and not a very good direction...
CONSIDER this how many of your tenants can afford to buy the number of houses and/or multi units each of you own? Its very possible that some tenants will own a house in the future will they own rentals maybe? maybe not? The same is true with any business from A to Z including the rental business. The tax base for businesses needed to be cut so business can reinvest in its own business and/or expand business. How many tenants and employees of businesses will mortgage everything they own work 60 hours a week to build a business. Then get over regulated and over taxed and still continue to do business in that environment? There should have been more of a tax cut to help small and large businesses to expand, hire more people, create a new product line. The Reagan Admin cut taxes especially depreciation from 30 years to 15 or 18 years that helped the real estate industry.
Over the next 3 years and maybe 7 years I bet there will be several of the Landlords/owners the poster and readers will purchase more real estate and expand their business.
NE of PA, BRAVO!!! You are living the American Dream and you really could careless about the tax base because you are moving forward with your next real estate purchase AND Ken of NY is making it happen, too.. The next Flip, the next Foreclosure, the next cash cow. Some of you may be self financed and others maybe mortgaged using O.P.M. in 2018 will be your best year yet.
Best of Success to each of you in your rental business with 1 rental or 100 plus rentals. Or like Roy of AL I think he owns the city block and now is working on the county, Mr Roy County of AL...
The Skys The Limit and the only road block is yourself no one else OK sometimes the pro tenant judge... BUT thats a minor set back if any...
The Best is yet to come in 2018!!! --99.56.xx.xx
trump tax bill & landlord (by NC INVESTOR [NC]) Posted on: Dec 27, 2017 9:38 AM
LLC's are pass-through businesses. They are a corporate structure that avoids the double taxation of paying personal and business taxes which means that their tax rates are applied at personal rates.
LLC's for rental properties do file 1065 at least mine does. I also file a Sch C since one of my other LLC's is a single partner which for tax purposes is treated as a sole proprietor. Both structures will be taxed at individual tax rates less a deduction of up to 20% to make the rate lower.
This was a last minute concession to the tax bill otherwise small businesses would have been paying higher rates than large corporations.
you should consult with an accountant. --71.75.xx.xx
trump tax bill & landlord (by TA [CA]) Posted on: Dec 27, 2017 10:19 AM
Because of depreciation, many rental businesses have minimal on paper profits now. But then the depreciation is recaptured at 25% when the property is sold. With the time value of money considered 25%, 10 spread out over years is effectively less than 25%.
This change to limit the tax on profit to 20% certainly shakes up those assumptions. The financial incentive to depreciate and take a paper loss is smaller. --73.158.xxx.xxx
trump tax bill & landlord (by Robin [WI]) Posted on: Dec 27, 2017 11:00 AM
For anyone that's interested, John Hyre is doing a two-hour webinar Jan. 4th on the new tax laws and how they apply to rentals. --204.210.xxx.xxx
trump tax bill & landlord (by Chris [CT]) Posted on: Dec 27, 2017 11:37 AM
I pay my accountant to deal with this.
You make money, you pay taxes. --24.45.xxx.xx
trump tax bill & landlord (by NC INVESTOR [NC]) Posted on: Dec 27, 2017 1:07 PM
You cannot avoid depreciation recapture tax. The tax law requires that recapture be calculated on depreciation that "was allowed or allowable". So whether you depreciate or not you will still be taxed on it and at the same rate. If I am going to be charged for it I may as well take advantage of it.
As for Sid's comment about not changing our business based on these tax changes. I agree. This tax bill was rushed through before anyone, even those who voted for it, had a chance to examine it. One flaw that has been been mentioned in several articles is a loophole where someone with a big payout in passive income (think real estate) could game the system and pay zero taxes. Once the IRS has the time to study the entire plan there will certainly be changes.
I don't agree that if the mid-term's change the majority in Congress the tax bill changes could be short lived. There are too many other issues they will choose to address and since most of the changes from this bill have a sunset clause there is no real incentive to make this their top priority. If there were any changes they would probably focus on child care, education and home ownership.
One thing is for certain...if it was truly their intention to simplify the tax code they failed miserably. Under normal circumstances I wouldn't consider doing my own taxes and this year with many of the provisions of the new plan going into effect on Jan 1 the need for an accountant has become an absolute necessity.
trump tax bill & landlord (by NE [PA]) Posted on: Dec 27, 2017 2:19 PM
I agree with Chris CT. I've been thinking about this post and several other posts like it.
It's not worth my time to try to understand this stuff.
It's kind of like hiring a framer or hardwood floor installer or electrician.
I want to know the task at hand and I want to know that it's done right. I don't need to know the species of pine used in the framing or whether or not it's #2 or prime.
I don't need to know if my hardwood floor guy used staples or nails to install the hardwood floor or whether or not it's a Bostich nailer. I need to know it's done right and that I AM SECURE with it.
I don't need to know what brand panel the electrician installs, only that it's the correct amperage for the job. I don't worry about his brand of tools, favorite wire nuts or electrical tape. I want it safe and I want to be protected from it.
I want my tax return safe and I want to be protected from taxes.
To me it's not the time or effort to try to figure out anything Washington does, let alone tax code. --50.32.xxx.xxx
trump tax bill & landlord (by Marv [IL]) Posted on: Dec 27, 2017 2:21 PM
I have the KMPG report. Please tell me where it says Sch E is included in the 20% deduction. --173.15.xx.xxx
trump tax bill & landlord (by NE [PA]) Posted on: Dec 27, 2017 2:22 PM
Furthermore, as investors, we pay professionals to make our problems go away. We handle what we can with our own comfort levels and hire the rest out. The new tax code is a problem caused by the fear of the unknown. It's worth paying the professional to make it go away. --50.32.xxx.xxx
trump tax bill & landlord (by Landlord ofthe Flies [TX]) Posted on: Dec 27, 2017 3:32 PM
My accountant is urging me to make next year's charitable donations this year and pay ahead on state tax this year so they can be deducted on this year's taxes since next year's deductions are capped at $10k. --108.69.xxx.xxx
trump tax bill & landlord (by NC INVESTOR [NC]) Posted on: Dec 27, 2017 4:09 PM
My acct. also told me to accelerate donations and taxes on my personal property but not on our rentals since property/state tax deduction $10,000 cap only applies to owner occupied homes. The cap applies to itemized deductions...as in owner occupied properties. For rental properties these are not itemized deductions rather they are deductions used in computing net rental income.
Under current law both owner-occupied and rental properties receive the same tax subsidies. Under the new law capping the allowable itemized deductions specifically for housing creates a real boon to rental properties while diminishing the value of home ownership. The prediction that owner occupied will lose a min. of 10% equity and that home sales will drop may well come to fruition. --71.75.xx.xx
trump tax bill & landlord (by Marv [IL]) Posted on: Dec 28, 2017 5:47 AM
The new law specifically says you cannot prepay your 4th state estimate before the end of the year and deduct it. --173.15.xx.xxx
trump tax bill & landlord (by WMH [NC]) Posted on: Dec 28, 2017 6:21 AM
Marv, just saw this about NY:
"Governor Andrew M. Cuomo has signed an emergency Executive Order to assist New Yorkers who wish to prepay next year’s property taxes this year, before the new federal tax law changes take effect. Payments must be made or postmarked on or before December 31, 2017. For more information, contact your local tax collecting officer.
The order authorizes localities to issue warrants for the collection of early property tax payments and to accept partial payment—allowing New Yorkers in such localities to pay a portion or all of their 2018 property taxes before the end of 2017, while the traditional rules on federal deductibility are still in place." --173.22.xx.xx
trump tax bill & landlord (by Marv [IL]) Posted on: Dec 28, 2017 8:07 AM
It will be different county by county. In many states the tax bills are already out for 2018. When these are paid, they are deductible. Others will be decided on a county by county basis.
But...so many people will be deducting RE tax, there is no way the IRS can audit all of them. Very few people will be audited and lose the deduction.
I call it "audit roulette". --173.15.xx.xxx
trump tax bill & landlord (by John... [MI]) Posted on: Dec 28, 2017 8:18 AM
Marv wrote: "The new law specifically says you cannot prepay your 4th state estimate before the end of the year and deduct it."
Yes, but the new law takes effect on January 1st, right? Isn't it correct that under CURRENT law, you can do that? (I'm not, so it doesn't matter to me. I just see a LOT of places pushing to do it -- and it seems like you CAN do it this last time, correct?)
trump tax bill & landlord (by NC INVESTOR [NC]) Posted on: Dec 28, 2017 9:44 AM
FOLLOWING IS A STATEMENT FROM THE IRS REGARDING PREPAYING PROPERTY TAXES:
A last-minute announcement by the IRS could hurt many taxpayers rushing to prepay their 2018 property taxes before the end of the year. Late Wednesday, the IRS announced that filers could claim their 2018 property tax payments on their 2017 federal taxes only if the taxes had been assessed in 2017. --71.75.xx.xx
trump tax bill & landlord (by Marv [IL]) Posted on: Dec 28, 2017 1:17 PM
John MI Here is a copy/paste from law H.R.1 page 33 under Limitation on deduction for state and locan., etc. taxes. Note the last sentence.
"The preceding sentence shall not apply to any foreign taxes
described in subsection (a)(3) or to any taxes described in
paragraph (1) and (2) of subsection (a) which are paid or accrued in carrying on a trade or business or an activity described in section 212. For purposes of subparagraph (B), an amount paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017, shall be treated as paid on the last day of the taxable year for which such tax is so imposed." --173.15.xx.xxx
trump tax bill & landlord (by Marv [IL]) Posted on: Dec 28, 2017 1:19 PM
Thus amounts paid in 2017, with respect to a state income tax imposed in 2018, shall be treated as paid on the last day of 2018. --173.15.xx.xxx
trump tax bill & landlord (by John... [MI]) Posted on: Dec 29, 2017 8:29 AM
Agreed. Doesn't matter for me. The only thing I paid early was my property tax for my personal home. But it is issued in early December and due by March, so I'm completely within the IRS guidelines to pay it "early" since it was assessed in 2017.
So, no worries from me. Thanks.
trump tax bill & landlord (by Coplin [CA]) Posted on: Dec 29, 2017 2:09 PM
Pg 67 Passthrough entities and sole proprietorships
Deduction of 20% for certain passthrough income
For tax years beginning after December 31, 2017... a deduction for 20% of the individual’s domestic qualified business income from...sole proprietorship.
...Qualified property means tangible property of a character subject to depreciation ...is used at any point during the tax year in the production of qualified business
Sched E rentals satisfy these requirements.
Hope this helps.
trump tax bill & landlord (by Marv [IL]) Posted on: Jan 2, 2018 5:56 AM
Per your quote... "business income" . Rental income is not business income it is investment income. Rental income is not included on Sch C (sol proprietorship).
If you are including your rental income on Sch C as a sol proprietorship, then yes you get the deduction. --173.15.xx.xxx
trump tax bill & landlord (by Jeffrey [VA]) Posted on: Jan 3, 2018 5:38 AM
A special webinar will be held Thursay, January 4th, which will cover many of the aspects of new tax bill and how it will impact landlords. There are several aspects which are VERY GOOD for landlords and can add tens of thosands of dollars to your bottom line if you learn how to take advantage of them. For info on the webinar, go to
trump tax bill & landlord (by NC INVESTOR [NC]) Posted on: Jan 4, 2018 1:28 PM
Rental income is business income if you meet the IRS definition of a real estate professional:
-more than one-half of the personal services the taxpayer performs in trades or businesses during the tax year are in real property trades or businesses in which the taxpayer materially participates, and
-hours spent providing personal services in real property trades or businesses in which the taxpayer materially participates total more than 750 during the tax year. --71.75.xx.xx
trump tax bill & landlord (by Marv [IL]) Posted on: Jan 7, 2018 7:47 AM
Real Estate professionals do not pay SS tax and do not file Sch C. Thus they do not have "business income". They have investment property. --173.15.xx.xxx