Tax Advice

[skaven]

As CCWS fans are famous for being rich and savvy, I thought I'd ask some advice here. :)

The tax guy I have met with is an older, used to throw rocks at the cops in Berkley back in the day... anarchist (as best I can figure).

He says I should depreciate my rental property on the Front Range to get more money back on taxes this year and in future years. If I ever sell the rental property, I can roll my profits using a 1031 exchange into another property and avoid paying capital gains taxes.

Sounds too good to be true, so before I put my faith in an old hippie who wants to jam at the local saloon with our fake band "Phlogiston," I thought I'd ask my rich and savvy peers. :D

I don't need no monkey bizness with the IRS bastages. :mad:

Thanks in advance. :thumbup:

[trish]

I'd ask another CPA.

[Climber]

I'd run from your current CPA.

[G.]

I'd run from your current CPA.
After you take his stash, you'd better run!

[oddlycalm]

Not sure what the reference to Front Range is, but he's pretty much on target. Depreciating the property is right on target. The depreciation can offset some or all of the tax liability from the rental income off the property. Once you get that property depreciated out it's time to do the 1031 exchange and start depreciating another property.

In a 1031 exchange you have 45 days after relinquishing your property to identify three potential like properties and 180 days to close the deal. There is an entire industry that serves this market. They basically set up the transaction for you, hold the funds, and are referred to as Qualified Intermediaries.The only real caveat on exchanges is that the Qualified Intermediary industry is not nationally regulated, so choose an outfit with a solid financial position and good reputation.

Welcome to your first step into the world of how to make a lot of money and never pay taxes. :D Seriously, this just barely scratches the surface.

oc

[Winston Wolfe]

I agree with OC... :thumbup:

My tax guy has both of my rental props on a depreciation plan, in order to offset rental income and appreciation.

Another "tip" \ recommendation to pass along for you, if it is well as truly an income property, is that the property is NEVER rented for all 12 months of the year..... ("Yeah, but I got this guy who has been there for 2 years and pays his rent like clockwork" ) - Like I said..... its always vacant for at least 1-2 months ;)

Offset that income by having a "vacant" place for a month or two each year, along with some advertising costs for looking for a tenant, and maybe even some paint supplies to "freshen" up the place aint too bad a tax break either. :D

[nrc]

Not sure what the reference to Front Range is,

Front Range of the Rockies. The little mountains before you get to the big mountains.

[skaven]

After you take his stash, you'd better run!

:laugh:

Or distract him with something shiny.

[skaven]

Welcome to your first step into the world of how to make a lot of money and never pay taxes. :D Seriously, this just barely scratches the surface.

oc

Thanks to oc and Mr. Winston Wolfe for confirming that this is a legal (and prudent) maneuver. I am all about not paying taxes. :thumbup:

I will ask him about the advantages of "vacancies" too. It will only be rented for part of 2005 regardless, but it's never too early to start planning how to get my tax moneys back in 2006 as well.

Back to jamming out "Subcutaneous Phat" and "Summer Sun Blues" with Phlogiston. :gomer:

And yeah, like nrc said, the Front Range is either (a) the mountains from Longs Peak to Pikes Peak or (b) more commonly, and what I was referring too, the communities along the I-25 corridor (Ft. Collins to Colorado Springs).

[G.]

One of these days, I gotta figure out how to do that whole "not pay taxes" thing.

Me, I just sit back and pay for your sorry azzes so you can have roads to drive on and free cheeze. Me, I just have too many kids (can you really have too many?) and take the big deductions.

skaven, glad you got a chuckle, even tho I helped none.

oc, wanna give a guy some financial planning help??

[Sean O'Gorman]

One of these days, I gotta figure out how to do that whole "not pay taxes" thing.

You could always just not have a job, pretty sure you wouldn't have to pay taxes then.