On today’s Tax Tuesday, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, CPA of Anderson Business Advisors, share their expert advice on tax strategies associated with setting up a home office, the potential consequences of being classified as a real estate dealer instead of investor, and how the IRS can view real estate flips as inventory and treat you as a dealer, leading to self-employment tax and other repercussions. Listeners are also guided through minimizing stock gains as a day trader and understanding rental property ownership. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- What are the requirements for bonus depreciation? - Bonus depreciation applies to tangible personal property with a depreciation life of 20 years or less.
- Can I 1031 exchange the entire proceed from the sale of a property with two structures, one rented and one as a main house? - Yes, you can 1031 exchange the rental portion, and possibly the entire property if it is converted into a rental before sale.
- Can I still invest in the 2022 tax year such as starting a solo 401K if I extended my tax return filing to October 2023? - Yes, you can make retirement contributions for 2022 up until your tax return deadline, including extensions.
- What are the benefits of an S corporation status for a small business owner versus sole proprietorship or LLC? - S-Corp can provide tax savings through reduced self-employment taxes, and may have lower audit rates than sole proprietorships.
- Can first-year business expenses be carried forward to the following year if there is no income in the setup year? - Yes, you can carry forward business losses to offset future income.
- Can I have a home office deduction if I rent the property? - Yes, renters can take a home office deduction if they meet certain requirements.
- How can I minimize day trading stock taxes? - Strategies include careful risk management, using tax-advantaged accounts, and offsetting gains with losses.
- Can I deduct expenses from my LLC registered as a partnership for fix and flip houses? - Yes, expenses related to the business operation can generally be deducted, though there may be limitations.
- Are all expenses related to the purchase and rehab of a rental property included in the basis for depreciation? - Yes, purchase price and most rehab expenses are included in the depreciable basis of a rental property.
- What's the best way to minimize the loss of passive losses on rental activities due to the AGI phase-out? - Carry forward passive losses until passive income is earned, become a real estate professional, or dispose of the activity.
Resources:
Infinity Investing
https://infinityinvesting.com/
Email us at Tax Tuesday
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-day-traders-can-reduce-taxes-legally
Anderson Advisors
https://andersonadvisors.com/
Toby Mathis YouTube
https://www.youtube.com/@TobyMathis
Toby Mathis TikTok
https://www.tiktok.com/@tobymathisesq
