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Category: Real Estate Investing

Illustration showing the legal and tax implications of adding children to a home title as joint tenants with rights of survivorship (JTWROS).
Estate Taxation

Hidden Dangers of Adding Children to Your Home Title: Avoid Costly Tax Mistakes Now!

Table of Contents A common scenario encountered quite frequently is individuals adding their children to their home’s title prior to death as a joint tenant with rights of survivorship (JTWROS) as a means to avoid probate. While there are logical reasons why doing so may be a good idea, in general, without proper tax and legal guidance, it can backfire for several reasons. State property laws establish the value transferred. Primary responsibility for property law rests with the states and not the federal government; therefore, in order to determine ownership and value the transfer of ownership, one must look to
Real Estate Investing

Escape IRS Catastrophe: Unravel Arcane Secrets of Interest Tracing in Property Refinancing

In the bustling arena of real estate investment and management, refinancing often emerges as a shrewd tactic to amplify assets for further growth. Yet, the tax repercussions of such refinancing moves—particularly those entailing cash distributions to partners or shareholders—are intricate and frequently underestimated. Grasping the IRS’s interest tracing rules under 1.163-8T becomes crucial for individuals navigating these waters, especially when cash is distributed among partners or shareholders. Alarmingly, even seasoned professionals specializing in real estate taxes may overlook these critical tracing regulations, a mistake that could lead to unwelcome surprises during an audit. The Basics of Interest Tracing Rules When
Real Estate Investing

The Myth of the “Real Estate CPA” How To Find a Versatile CPA Firm

Navigating Your Financial Journey with a Versatile CPA Firm Let’s clear the air right off the bat: the term “Real Estate CPA” is a bit misleading. While some CPAs, or CPA Firms might focus their practice around real estate clients, it’s crucial to understand that there’s no special certification making one a “Real Estate CPA.” The National Association of State Boards of Accountancy (NASBA), which regulates CPAs in the states, doesn’t hand out titles based on industry specialization. This distinction is more than just semantics. In fact, when someone labels themselves as a “Real Estate CPA,” it might signal a
Real Estate Investing

Understanding Passive vs. Non-Passive Real Estate & Business Activities, and Navigating Self-Employment Taxes: A Focus On Airbnb And The 7-Day Rule

Understanding Passive vs. Non-Passive Real Estate Activities: A Focus on Airbnb and the 7-Day Rule In the complex world of real estate taxation, especially for Airbnb rentals, distinguishing between passive and non-passive income is crucial. This distinction is made often-times before it is too late, because many tax professionals are issuing guidance to prospects and clients, that just brush upon the tax law as written. They do not take the time to analyze clients particular facts and circumstances, and integrate them with the tax laws as written. The Internal Revenue Code (IRC) Sections 469 and 1402 play pivotal roles in