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POST Election Congress Grapples with Extenders as Lawmakers Plan for 2015

The results of the mid-term elections create a new dynamic in Congress with Republicans poised to take control of both the House and Senate in January. Prospects for tax reform may have brightened for 2015. In the meantime, the lame-duck Congress must deal with some urgent tax bills, most notably the tax extenders.

Expired tax breaks

As the 2015 filing season grows closer, lawmakers are under pressure to renew a package of expired tax incentives, known as tax extenders. There are more than 50 expired extenders that impact individuals and businesses. For individuals, some of the most far-reaching are the above-the-line deduction for higher education expenses, state and local sales tax deduction, mortgage debt forgiveness, deduction for mortgage insurance premiums, credit for energy improvements to personal residences, and the teachers’ classroom expense deduction. For businesses, the expired incentives include the research tax credit, special expensing rules for film and television productions, bonus depreciation, enhanced small business expensing, incentives to encourage production of wind energy and alternative fuels, and many more. All of these incentives expired after December 31, 2013. That means taxpayers cannot claim them on their 2014 returns filed in 2015 unless the incentives are extended.

Many Congressional staffers and Hill observers predict that lawmakers will renew the extenders in December. A vote could come in the House and Senate before December 20. A comprehensive extenders bill, the EXPIRE Act, is pending in the Senate. A similar bill, however, has not moved in the House. Instead, the House voted to extend some but not all of the extenders. Before year-end, the Senate could approve the EXPIRE Act and send the bill to the House. The Congressional Budget Office estimates that extending all of the expired provisions would cost $94 billion over two years (reflecting a retroactive extension to January 1, 2014 and an extension through the end of 2015). Our office will keep you posted of developments as tax filing season approaches.

The IRS has cautioned that the longer Congress waits to renew the extenders the greater the likelihood that the start of the 2015 filing season will be delayed. The IRS’s return processing systems are programmed for the current tax laws. The IRS must update its return processing systems for any changes that lawmakers make to the tax laws, such as renewing the extenders. Late legislation in the past has delayed the start of the filing season by around two weeks.

Looking ahead

When the new Congress meets in January, Republicans will have majorities in the House and in the Senate. GOP leaders have started to outline some of their priorities for 2015, including tax-related issues.

Tax reform. Rep. Paul Ryan, R-Wisc., who will serve as chair of the House Ways and Means Committee, has indicated his interest in tax reform, but so far has not provided any details. Ryan’s counterpart in the Senate, Sen. Orrin Hatch, R-Utah, who will serve as chair of the Senate Finance Committee, has also expressed support for tax reform. President Obama repeated his proposal to reduce the corporate tax rate in exchange for the elimination of some unspecified business tax breaks. Whether any tax reform proposals will gain traction in 2015 is unclear.

Affordable Care Act. Shortly after the elections, Hatch said he will propose an alternative to the Affordable Care Act (ACA) as well as bills to repeal parts of the ACA, such as the medical device excise tax. House Speaker John Boehner, R-Ohio, added that the GOP-controlled House will move to repeal the ACA in 2015.

Permanent extenders. Any renewal of the extenders will be temporary, carrying a likely expiration date of December 31, 2015. Lawmakers are expected to take a close look whether to make permanent some of the extenders and allow others to expire after 2015. Good candidates for a permanent extension are the state and local sales tax deduction, the higher education tuition deduction, enhanced small business expensing, and the research tax credit. One drawback, however, is the cost of making these incentives permanent. Many lawmakers will want to offset the cost. Negotiations over the long-term fate of the extenders are likely to be contentious as taxpayers seek to preserve their special tax breaks.

Corporate profits. In 2004, lawmakers agreed to a temporary repatriation tax holiday that allowed businesses to repatriate foreign profits at lower tax levels. Similar legislation is expected to be introduced in the new Congress. Again, negotiations will be intense as some lawmakers would seek to offset the cost of a repatriation tax holiday.

If you have any questions about the lame-duck Congress and the prospect for tax legislation in the new Congress, please contact our office. Keep in mind that as 2014 draws to a close, so does the time in which to make possible tax savings moves. Renewal of some or all of the extenders could impact your year-end tax planning.


If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
 
 
GrinnanMikeCPA
 
 
 
 
J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive, Suite 3000
Louisville, KY 40223
Office 502-657-6333
Fax 502-657-6334
Email Mike@JMGCPA.com

Hello and Check This Out!    
Great News for Investors and Sellers FreeGiftComments

I received the article below in an email sent to me from National REIA.

My Short Version Summary of Your Benefits:

1.) Investors who have short saled properties where the lender accepts less than the balance owed, typically had to report the amount of the discount to the IRS as income and pay income tax on the discounted dollar amount. With this new extension, it prevents the IRS from taxing your cancelled debt or the amount of your discount. It appears this expired in 2013; however this new extension act now includes both 2013 and 2014 tax years.
SPECIAL NOTE: If you have short saled any properties in 2013 and 2014, you should verify and make sure your tax preparer knows all of the details on this. I will bet many investor’s tax preparers were aware of the original act, but not this extension.

2.) SELLERS: when buying investment property using “short sale” technique, you have a brand new benefit for your seller. Get it short saled and close before the end of 2014, and they will not get taxed on the amount the lender discounts.  HUGE Benefit for your Seller. Once again, remember your seller might check with tax advisor and they may not be aware of this new extension to the Mortgage Forgiveness Debt Relief Act Extension.

Below is the email I received this morning.


 

Mortgage Forgiveness Debt Relief Act Extension:

Over the course of the first two weeks in July, National REIA’s lobbying arm in Washington, D.C., in concert with National REIA board member and my good friend Tom Zeeb, met with the key sponsors of legislation to extend the short sale tax break retroactively for 2014 and through 2015.

The extension of this tax break, which prevents the IRS from taxing cancelled debt during the utilization of short sales, is critical to restoring the use of short sales.

Since the failure to extend the Mortgage Forgiveness Debt Relief Act into 2014, short sales have fallen dramatically since the passage of the tax break implementation in 2008 to 2013 and through the passage of FHFA’s National Standard Short Sale Program, another product of National REIA’s lobbying arm.

 


What are Your Comments On This New Extension? FreeGiftComments 
(please click on the “Leave Comments” button at top right of this article)

SigMikeButler

GrinnanMikeCPA  J. Michael Grinnan CPA

How do I Compute depreciation for tax purposes?

The simple concept of depreciation can get complicated very quickly when one is trying to determine the proper depreciation deduction for any particular asset. Here’s only a summary of some of what’s involved.

Identifying the asset

The modified accelerated cost recovery system (MACRS) is generally, but not always, used to depreciate tangible depreciable property placed in service after 1986. The MACRS deduction is computed on Form 4562, Depreciation and Amortization. Click Here for Full Video/Article (Members Only)

Real Estate Investor Deal Analysis Review Training Audio on Single Family Home

Jimmy Moncrief interviews Mike Butler to conduct a real “Deal Analysis Review” on a single family home that Jimmy wants to buy for a rental.

 

Back in May of this year, week of the Kentucky Derby here in my hometown, I had the great privilege and honor to meet Jimmy Moncrief and his sidekick and best friend Brad. Both are from Tennessee and were attending their first Kentucky Derby, a bucket list sort of thing I imagine.

Jimmy is one of my Gold Member and he had requested and scheduled a private one on one coaching/mentoring session, but in a very creative and unique way of doing it.

Jimmy wanted to record it as a live interview of a “Deal Analysis Review” on one of his pending leads on properties to buy. PLUS, Jimmy wanted permission to put it on his own website as a podcast thing. Here is the link to Jimmy Moncrief’s website http://realestatefinancehq.com/turn-landlording-autopilot/

I need your help please. A Little Feedback on the 2 questions below, thanks in advance.

QUESTION: Would You Like to Have Podcasts available from Mike Butler?
(please answer below by entering your answer and comments in reply area)

QUESTION: If you answered Yes, Do You Prefer Audio Only or both Video or Both?
(please answer below by entering your answer and comments in reply area)

 

Below is Jimmy Moncrief’s article and link to the podcast interview.

 


 Landlording on Auto-Pilot: A Simple, No-Brainer System for Higher Profits and Fewer Headaches

  Click Here for Full Video/Article (Members Only)

GrinnanMikeCPA

 

 

 

 

 

   J. Michael Grinnan CPA

 

FAQ: What is the self-employment tax?

Taxpayers who are self-employed must pay self-employment tax on their income from self-employment. The self-employment tax applies in lieu of Federal Insurance Contributions Act (FICA) taxes paid by employees and employers on compensation from employment. Like FICA taxes, the self-employment tax consists of taxes collected for Social Security and for Medicare (hospital insurance or HI).

The self-employment tax is levied and collected as part of the income tax. Click Here for Full Video/Article (Members Only)


WDRB 41 Louisville News

LOUISVILLE, Ky. (WDRB) — Police have arrested 54-year-old Anthony Jecker for shooting and killing another man at an apartment complex on Fegenbush Lane.

According to police, around 3 p.m. Jecker and his landlord got into an argument outside an apartment. 

They say the altercation then led to the suspect pulling out a gun and shooting the other man.

The victim was pronounced dead at the scene.

Neighbors and police both tell us that the apartment complex here on Norbrook drive and Fegenbush Lane is in a family friendly neighborhood, and this is very out of the ordinary.

“Someone decided to do something that, obviously, killed someone else and could have put a lot of people in danger.” LMPD spokesperson Dwight Mitchell said, “thankfully that was not the case, but unfortunately there was one person who did die from this.”

Neighbors say Jecker does live in the apartment complex with his wife and a dog.

They say his wife left in a police car. 

Jecker is charged with murder and tampering with physical evidence

link to full article
http://www.wdrb.com/story/26016414/lmpd-arrest-suspect-in-shooting-at-fegenbush-lane-apartment-complex

 

Short from Mike Butler

My prayers go out to this landlord and his family. Although at this time, the media has not released the name of the landllord who was killed by his own tenant, this is real life about how dangerous people are in today’s world. Even Mayberry, USA is not safe.

This should be a huge wake-up call to all rental property owners in how you communicate and treat your tenants. Odds are, this landlord was working his butt off to build for true financial freedom with his wife and family.

Please remember this landlord’s family in your thoughts and prayers.

PLEASE SHARE YOUR COMMENTS BELOW

 

 

Download Your FREE Poster by filling in the blanks in the form below

PosterScamWhiteSAMPLE




 

Odds are, if you are in the residential rental property world, you have heard or know an investor who has been scammed by one of the internet dirt-bags.

This is nothing new. Remember the online scam where the victim is sent an email from who knows where, reporting they have won or inherited a billion dollars? But in order to claim it, the victim must pay for the processing fees and government stamps, etc.

You and I both say “there’s no way anyone with any sense would fall for this.” But Guess What? It is still happening every day with normal folks. These scammers would NOT be doing this if it did not work.

Here is how I know it is still happening and the scammers are still getting money from victims. My banker told me just a few weeks ago, he gets one or two customers a week who want to wire money to these scammers. Unbelievable. The scams continue.

Even as a retired Louisville Police detective, I have been scammed on several of my rentals. Let me share with you how it works.

The scammer surfs the internet for houses for rent. They find an unlimited supply of homes for rent on various websites from www.VistaKY.com, www.TenantFinderService.com, www.RentalHouses.com, www.Zillow.com, www.Craigslist.org and many more.

They find your rental house to target. The address is 123 Main St., Louisville, Ky 40207. It’s a 3 bedroom, 2 bath home with finished basement and 2 car attached garage. The rent for this home is $1200.

Here is what usually happens in this rental property scam.

STEP 1: After finding your target property, they download your all of your photos and details about this property from the online source they viewed. Think about this for a moment. The scammer has everything you have entered on the internet for the public to view. PLUS, most of the time they can use Google Maps to drive down the street, see what is on the corner (Walgreen’s, McD’s, etc) and the scammer can describe your rental and the neighborhood in great detail.

STEP 2: The scammer enters ALL of the information on your rental by “Stealing and Pasting” into a CraigsList.com Ad or any other website allowing investors to enter rental properties for free. The scammer lists the rent for your home at $899 which is a bargain for your rental home.

STEP 3: The Scammer’s ad will always have some kind of B.S. story about them being an “Out of Town Owner.” Some times they request a deposit up front and they will give them the key to see the home after receiving their money. They also inform the interested potential tenant that they have hired a local company to help get it rented and you might see their sign in the yard. Scammer tells them he is not satisfied with their service and he just decided to rent it himself or herself.

STEP 4: Unfortunately, many times the applicants actually send  money to the scammers and wait for the key to the house. After receiving no response, these folks then call the number on the yard sign and complain to the real owner (YOU) they want their money back. Don’t laugh, this is true.

You are totally blind-sided when you get this call. You are furious, ticked off, and want to find out exactly what is going on with your rental. Your jaw drops and you want to do something, take action now to stop it now.

What Can You Really Do? Think about it. Can you call the police? OK, what will the police do after hearing your story. First of all, you are NOT the victim. Your potential applicants are the victim. Who is going to pay for this? Who will get locked up and go to jail? Good Luck!

So what is a poor investor to do?

Here is your Best Tool To Prevent Your Leads from Being Scammed. It is simple and easy.

Your solution is shown below. Get some bright neon yellow paper and print.

Print 2 or 3 copies and place several on the inside of the front windows of your vacant rental and I promise, this will definitely get the attention of your prospective applicants.

To Your Continued $uccess,

Mike Butler

 

Attention Landlords and Property Managers

In my neck of the woods, we are having record setting extreme cold temperature that seem to keep lingering on and on. In the past, we are use to having a spike for a day or two and then warm weather returns.

This year, right now, Alaska is warmer than my hometown here in Louisville, Kentucky.

Frozen pipes can be a devastating blow to your wallet and bank account, especially when it seems to never leave.

Keep in mind, in my “Landlording On AutoPilot” system, we send a Resident Newsletter with each monthly billing of rent to our residents. Plenty of winter cold weather tips are always in each newsletter before the season hits us.

This year is different. It feels like we are living in the arctic or Siberia. In an effort to try to keep plumbing cost down, I created this email to send to all of our current residents.

Please note, I understand not every resident will follow these instructions, but if one resident does follow these instructions you have save money, time, and grief.

 

Here is the email. Feel free to steal and paste (copy and paste) to send to your residents (tenants).

Subject: “WARNING! How to Prevent Frozen Pipes and Headaches!

BODY:   

EXTREME COLD is happening and TONITE!

RECORD COLD Temps below ZERO

TIP: How to keep your pipes from freezing Click Here for Full Video/Article (Members Only)

Happy Holidays and Here Is Your New Secret Money Maker for Landlords

My BIG Secret Tip to Get Your January Rents PAID Early!

It Works! 

I have been doing it for over 20 years!

If you have tenants and rental properties, this is a NO-BRAINER to make sure your tenants pay next month’s rent early.

Step into your Tenant’s shoes for just a moment. Holiday season, cold weather with higher utilities bills, extra expenses for holiday season… gifts for family, kids, etc.

Here is a great, simple, POWERFUL tool to make you look like a wonderful person and at the same time, almost guarantees your rent payment bill gets put on TOP of their bills to pay first or now.

The simple version is your very own Season’s Greeting Holiday Rent Coupon! You can get my Holiday Rent Coupon for free by clicking on the link below.

 

Here is How It Works!

As you probably already know, we bill all of our tenants on the 20th of this month for next month’s rent.

This means on December 20th, next Friday, my office manager Whitney will send monthly statements to all Tenants. Included in their monthly statement is the Vista newsletter for residents and their Vista Holiday Rent Coupon is enclosed as well.

 

How Much is the Discount?

Today the Holiday Coupon is $10 and can only be redeemed by making January 2014 rent payment on or BEFORE January 1. PERIOD.

Years ago, I tried fresh turkeys… did not work and made a mess. Depending on the size of your heart and bank account, you could change to $25, $50 or even $100. 

Click to Get Your Email with Link to Download

Download Now

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