Is exactly 100 hours enough for the short-term rental participation test?
For this test, distinguish more than 100 hours from exactly 100, then compare the taxpayer's participation with each other individual's participation.
Tax Strategy Blog: Page 13
1236 articles for business owners and real estate investors. Page 13 of 35.
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Showing articles 433–468 of 1236.
Is advance rent taxable before the tenant uses the property?
For a cash-method landlord, advance rent generally enters income when received, unlike a genuinely refundable security deposit.
Is a refundable rental security deposit taxable when received?
Read the lease to distinguish refundable security from advance rent or a nonrefundable charge.
Is a deductible retirement contribution the same as tax-free retirement income?
Identify whether the contribution is deductible, Roth or after-tax under the actual plan.
How should I document a trip that mixes business and vacation?
Write down where the trip occurred, its primary purpose, business days, personal days and who traveled.
How should a business owner pay estimated tax on uneven income?
Build a period-by-period profit schedule and include household wages, investment income and other activities.
How should a business owner handle reimbursement advances?
Track the date and purpose of the advance, the expenses substantiated and the balance returned.
How does personal use of a vacation rental affect deductions?
Track rented days, personal days, below-market use and days devoted to relevant maintenance activities.
How do rental property sales affect quarterly estimated taxes?
Use the sale price, selling costs, historical adjusted basis and depreciation records to calculate the tax items.
How do I calculate adjusted basis before selling a rental?
Not ordinarily. Tax basis follows the actual acquisition and adjustment history, not simply current market value.
How do I avoid counting a catch-up deduction twice?
Keep separate columns for original basis, prior depreciation, the method-change adjustment and current-year depreciation.
Does the previous owner's cost segregation study determine my depreciation?
A seller's report may contain useful property descriptions, but its tax basis, dates and elections belong to that taxpayer.
Does paying off my mortgage eliminate tax on a rental sale?
No. Debt repayment and taxable gain follow different calculations.
Does paying myself more S corporation wages always reduce my total tax?
No. Payroll costs, retirement limits, QBI and other household facts can move the overall result in different directions.
Does meeting material participation release every prior suspended loss?
Identify the origin of each suspended passive loss and whether the activity is now a former passive activity.
Does guaranteeing my S corporation bank loan create debt basis?
Read the loan documents to identify who borrowed and who advanced funds to the corporation.
Does financing a property reduce the basis available for depreciation?
A property purchase financed with genuine debt can include amounts beyond the down payment in acquisition basis.
Does extending my business return extend my tax payment deadline?
Identify the corporation, partnership and individual filings involved and distinguish their filing extensions from payment requirements.
Does an estimated tax safe harbor mean I will not owe more in April?
Ask for two figures: the amount needed under an applicable payment safe harbor and the projected final tax liability.
Does an average guest stay of seven days make my rental loss deductible?
Calculate average customer use from the relevant rental periods and retain the reservation data.
Does an accountable plan let me deduct all my personal meals?
Separate ordinary personal meals from meals that qualify under the applicable business rules.
Does a real estate license automatically qualify me as a real estate professional?
Review qualifying real property trade or business services, the more-than-750-hour requirement and the more-than-half personal-services requirement.
Does a part-time S corporation owner need reasonable compensation?
Document the work performed for this corporation separately from work for another employer.
Does a new cost segregation report require amending every old return?
A study measures and classifies property, while return implementation requires a separate procedural decision.
Does a depreciation correction guarantee a refund?
Start with the allowable correction and determine the tax year in which it is reported.
Does a cost segregation deduction equal the refund I will receive?
Ask for the study's identified depreciation separately from the amount currently usable on the return.
Does a 1031 exchange permanently erase depreciation recapture?
A qualifying exchange can defer eligible gain, but is not a blanket promise to permanently erase depreciation-related tax.
Do two S corporation owners have to earn identical salaries?
Prepare a responsibilities matrix for each owner, including revenue production, supervision, administration and time away from the business.
Do two businesses give me two separate employee deferral limits?
Identify all plans receiving employee deferrals, including plans at an unrelated W-2 job.
Do tenant-paid expenses count as rental income?
Determine whether the tenant paid an expense the landlord was responsible for and whether the payment reduced rent owed.
Do retained S corporation profits affect shareholder stock basis?
Review K-1 income and the other annual basis adjustments rather than using retained earnings on the books as a shortcut.
Do my spouse's hours count toward rental material participation?
Maintain the spouse's work record alongside the owner's record and identify actual services, dates and activity.
Do I owe personal estimated tax when my S corporation keeps the cash?
Reconcile expected K-1 income with wages, shareholder basis and the corporation's cash needs.
Do employees change how much my retirement plan will cost?
Request a proposal showing owner allocations, staff contributions, administration, actuarial costs and other fees separately.
Do Airbnb platform fees reduce the rent I report?
Download platform statements showing guest charges, owner-paid fees, refunds, adjustments and amounts handled for taxes.
Do 1031 exchange deadlines pause while I negotiate financing?
A deferred exchange generally has a 45-day identification period and completion by the earlier of 180 days or the relevant return due date including extensions.