Episode 62: Tax Considerations for Real Estate Investors

As a real estate investor or property manager, it’s imperative that you have great representation regarding tax considerations. This is true, not only for running our own businesses, but also to provide the best possible advice if you have investment partners or investment property clients for your property management business. The key is planning to successfully and legally reduce tax liability in order to maximize after-tax income.

On this episode of Property Management Brainstorm, host Bob Preston is joined by Richard Hart, of Hart & Associates, a tax consulting firm providing guidance and services to property managers and investors. Richard is also a NARPM affiliate for those of us who are members of the National Association of Residential Property  Managers. Richard and Bob explore tax related considerations that all property managers and investors will want to hear.
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Topics Covered

[2:40] Richard introduces himself, his tax accounting company Hart Associates, and how they can help you protect your hard earned money through legitimate and legal real estate tax planning.

[4:25] Reactionary vs. proactive: Richard explains the most common tax mistake he sees from real estate investors and property managers.

[7:25] From a tax and legal perspective, what is the best company structure is most favorable for real estate investors and property management companies?

[10:15] Many real estate companies received Payroll Protection Program loans during the peak of the Covid-19 pandemic. What is the proper accounting method for showing these loans on your company books once the loan has converted to a grant?

[13:10] Bob and Richard discuss the length of time real estate accounting and tax records should be retained in case of audit.

[15:05] Richard reviews the process for handling foreign investors who are seeking property management for their USA based real estate investment.

[20:45] IRS Forms 1099-misc and 1099-NEC, which one is right for reporting nonemployee income?

[22:05] The "2 out of 5" rule of rental properties to claim the tax exemption on capital gains when a property is sold.

[25:32] A quick overview of the concept of 1031 Exchange.

[29:55] Real estate tax decution fundamentals.
 
[33:10] Richard shares his closing thoughts and how you can reach him to learn more about tax considerations for real estate investors.

Connect with Richard Hart
https://www.hartassociate.com/

Connect with Bob Preston
https://www.propertymanagementbrainstorm.com/

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