Coming into its own: LLC investments

Posted by Cory Caddell, Tax Services Manager on Sep 7, 2016

During the last decade, limited liability companies ("LLCs") have become one of the most preferred forms of business entities through which to hold title to investment real estate properties. Prior to LLCs, real estate investors seeking limited liability protection were largely limited to using corporations to acquire title — a form of entity that has potential drawbacks.

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Topics: Real Estate, Accounting Tips, Tax, Construction

Tax Update: Passive activities and real estate

Posted by lgtcpa on Sep 7, 2016

If you’ve invested in a trade or business in which you don’t materially participate, remember the passive activity rules. Why? Passive activity income may be subject to the NIIT, and passive activity losses generally are deductible only against income from other passive activities. You can carry forward disallowed losses to the following year, subject to the same limits.

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Topics: Real Estate, Accounting Tips, Tax

When a bargain isn’t a bargain

Posted by Cory Caddell, Tax Services Manager on Jul 26, 2016

Factors to consider when purchasing property

Even though today’s real estate market has improved, you can still find investment properties at bargain prices. But, as with any real estate investment, the price may be too good to be true. Therefore, you’ll need to consider more than just the purchase price.

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Topics: Real Estate, Tax

Your Dealership Real Estate May Offer You a Significant Tax Advantage

Posted by Britt Keener, CPA, Tax Manager on Mar 15, 2016

 Could you use a tax strategy that can save you significant tax dollars and boost cash flow? If so—and who doesn’t want to save tax?—consider looking into a cost segregation study on the dealership real estate you own. It could save you a bundle.

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Topics: Auto, Real Estate

Lease Option or Sale? It Matters to the IRS

Posted by Shea Kracheck, CPA, Tax Principal on Feb 15, 2016

Lease options are often used in real estate transactions, especially when property owners run into difficulty finding a buyer. If you’re not careful, though, the IRS might recharacterize the arrangement as a sale in the form of a contract for deed.

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Topics: Real Estate

How Real Estate Can Reduce Your Tax Obligation: Home office deductions

Posted by Jennifer Wangner, Tax Senior II on Feb 15, 2016

Do you ever work from home?

If your use of a home office is for your employer’s benefit and it’s the only use of the space, you generally can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses. Further, you can take a deduction for the depreciation allocable to the portion of your home used for the office. Note that you will recover the cost when you sell your home, so you should be sure to keep track of any depreciation taken. You can also deduct direct expenses, such as a business-only phone line and office supplies.

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Topics: Real Estate, Accounting Tips

IRC Section 1231: It’s the best of both worlds

Posted by Abby Mackey, Tax Manager on Feb 3, 2016
Most owners and developers know that the sale of a business asset, including real estate, can have significant tax implications. The tax effects generally come down to whether the sale results in a gain or a loss. Ideally, gains would be treated as long-term capital gains, subject to lower tax rates, and losses would be considered ordinary losses, which could be applied to offset ordinary income. Section 1231 of the Internal Revenue Code ("IRC") permits just such advantageous treatment—the best of both worlds—for certain types of property in certain circumstances.
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Topics: Real Estate, Tax

Defining Net Investment Income under the Affordable Care Act

The 3.8 percent net investment income tax (“NIIT”) under the Affordable Care Act (“ACA”) has been in effect since 2013 and remains in effect for tax year 2015 and beyond. The taxpayer is liable for NIIT on the lesser of their net investment income (“NII”), or the amount by which their modified adjusted gross income (“MAGI”) exceeds the threshold based on filing status.

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Topics: Real Estate, Accounting Tips, Tax, Healthcare, Retirement Plan Services

Local Associations Welcome LGT Aboard

Posted by Lee Ann Collins, CPA, Managing Partner on Jan 26, 2016

Effective January 1, 2016, Brad Gross, Partner, and Shea Kracheck, Principal, at Lane Gorman Trubitt, PLLC (“LGT”), have become board members of local organizations. Gross joins the 2016 TEXO board, a Dallas/Fort Worth local collaboration of two national construction industry organizations, and Kracheck accepted a board role at the Commercial Real Estate for Women’s Dallas Chapter (“CREW Dallas”).

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Topics: Firm News, Real Estate, Tax, Construction

Seize Opportunities While They’re Available

Posted by lgtcpa on Dec 15, 2015

With estate, gift and generation-skipping transfer ("GST") tax exemptions at record-high levels, far fewer taxpayers need to worry about being subject to these taxes. But Congress could still pass legislation at any time making estate tax law changes—and not necessarily for the better. So whether or not you’d be subject to estate taxes under the current exemptions, it’s a good idea to consider whether you can seize opportunities to potentially lock in tax savings today. Those same opportunities might not be available in the future.

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Topics: Real Estate, Accounting Tips, Not-for-Profit, Tax