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Taxes! Speaker notes from 2/28/17

  • 03/01/2017 8:51 PM
    Message # 4642190

    Thanks to everyone who attended the meeting last night!  I have included my notes which were on the screen.  Take advantage of your taxes - don't let them take advantage of you!

    As a reminder, I am not a CPA.  You should consult with your tax accountant regarding the applicability and accuracy of these topics as they apply to your specific situation.

    Property Taxes:

    1. Know the difference between TV, SEV and Cash Value

      1. TV is what your taxes are calculated upon each year.

      2. When buying a property TV are “uncapped” - increasing to the SEV.

        1. Other events may cause uncapping.

        2. May be appealed.

          1. Time limits apply for appeals.

      3. TV is limited to increases of 5% OR a factor similar to COL or Inflation - whichever is LESS.

      4. SEV may be updated without limit.

    2. ALWAYS calculate taxes on the SEV when buying.

    3. Do not rely on seller’s current taxes as indication of future taxes

    Income Taxes

    1. Plan for your income taxes

      1. Talk to your tax advisor/preparer throughout the year.

        1. Know when a deduction can be taken

          1. Expenses

          2. Mileage

          3. Registrations/personal property taxes

        2. Know how to maximize deductions and/or credits

          1. Understand De Minimus Safe Haven rules

            1. These rules can be used to maximize your expenses

            2. Avoid “capitalizing” some larger projects

      2. Understand when you jump tax brackets and how it impacts your projections.

         2. Take advantage of business deductions for your properties

         a.  Mileage deduction often overlooked or ignored.

         b.  Depreciation is REQUIRED by the IRS.

    1. Depreciation reduces your BOOK VALUE (Basis) of a property

    2. Recaptured upon the sale of your property.

         3.  Rehab work performed before a property before it is placed in service is

     added to basis.

    Transfer Taxes

    1. Included in your closing costs.

    2. Calculated on increments of $500

      1. County tax: .75 cents per $500 in value

        1. Reduced to .55 cents if pop. below 2MM

      2. State tax: $3.75 per $500 in value

      3. No tax is total value is less than $100

         3.  There are exceptions!

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