CPA for Realtors

02/08/2024

I don’t just file tax returns. I give you a proactive plan to keep more of the commissions you earn by saving your income taxes!

Accountants and tax preparers just record history — the history you give them. They don’t give you the simple, proactive strategies that cut your income to the absolute lowest legal amount.

Reach out today, so we can establish a tax plan that will benefit you now and for years to come!

The Neve Group, LTD is a CPA firm providing accounting, bookkeeping, tax and controllership services in Plymouth Meeting, PA.

02/19/2023

Mad respect to all my Realtor clients out there. Keep grinding every day!

01/20/2023

The Section 1031 exchange allows you to sell a piece of appreciated real estate and defer all the taxes as long as you invest the entire proceeds in like-kind property.

And then consider this: a cost segregation study allows you to separate qualifying real estate into separate components with shorter depreciable lives that speed up deductions and in many cases create immediate write-offs.

Continuous use of the Section 1031 exchange enables you to continue upgrading your real estate portfolio without incurring any federal taxes on the upgrades. And you can keep doing this until you die.

When you upgrade your real estate using the Section 1031 exchange, you have the opportunity to use a cost segregation study to create large deductions in the year of exchange.

01/13/2023

The real estate boom appears to be over for now.

Morgan Stanley predicts that house prices could fall by 10 percent by the end of 2024, or perhaps twice as much in a worst-case scenario.

Those who purchased their homes at the top of the market could be in trouble, especially is the U.S. falls into a recession.

It’s true. Homeowners don’t want to go through a foreclosure and the resulting destruction of their credit rating. Fortunately, there is an alternative for homeowners having trouble making their mortgage payments: a short sale.

Here are our five main takeaways regarding short sales:

1. Homeowners whose homes have declined in value and who can’t make the mortgage payments can avoid foreclosure by getting their lenders to agree to the sale of the home for less than the amount of the outstanding mortgage—a short sale.

2. Lenders that agree to the short sales typically forgive a portion of the mortgage loan. Such loan forgiveness constitutes taxable income to the homeowner unless legal exception applies

3. Forgiveness of non-recourse home loans in short sales does not result in taxable income to the homeowner. Twelve states allow only non-recourse home loans

4. Forgiveness of up to $750,000 in recourse home loans following a short sale is excluded from tax if the mortgage is defined by the tax law as qualified principal residence indebtedness (that is, acquisition indebtedness for the homeowner’s main home).

5. Homeowners who don’t qualify for the qualified principal residence indebtedness exclusion can still escape being taxed if they were insolvent when the debt was canceled by their lender. Homeowners qualify for this exclusion if the total of all their liabilities is more than the fair market value of all their assets immediately before the debt cancellation.

01/12/2023

According to the Chief Counsel Advice (CCA), when you’re not a real estate dealer, net rental income from renting our living quarters is considered rental from real estate and is therefore excluded from self-employment income—as long as you don’t provide services to rental occupants
The self-employment income exclusion for net rental income collected by a non-dealer is a statutory provision. The statue itself doesn’t say anything about providing services.
But the IRS regulations state that providing services to renters can potentially cause you to lose the exclusion from self-employment income.
According to the CCA, you must include the net rental income in calculating your net self-employment income—which could cause you to owe the dreaded self-employment tax—if you provide services to renters and the services are not clearly required to maintain the living quarters in a condition for occupancy and are so substantial that compensation for the services constitutes a material portion of the rent.
Our overall conclusion is that net rental income from expensive vacation properties would typically not be exposed to the self-employment tax, even when lots of services are provided to renters because the services are usually customary rather than above and beyond the norm, and the values of the services are usually insubstantial in relation to the rental changes.

01/05/2023

No matter what you do for a living, all of us have some sort of “retirement” place in our minds. It might be part-time consulting in your field for a premium or it could be retiring to Lake Havasu and acting like your grandparents did, but planning is the key to realizing whatever dream you have for retirement.

Though it might be intimidating at first, there are some things you can do now to get a rough estimate of what you will need for retirement – even if there are still some unknowns.

1. Take a look at your budget

If you already have a budget, this part will be much easier, since you’ll be basing your future spending on your current spending. But if you don’t year have one, take your current expenses from the last month and record them, either on paper or an Excel spreadsheet.

2. Figure out how much you’ll spend in retirement

In another column on the spreadsheet, write down what you think your budget will be in retirement minus paid off debts. But be realistic – there may be fun items you’d like to create a budget for, such as travel, golf, or eating out. Once you’ve added up these expenses along with your monthly bills, you’ll have an estimate you can use to plan out what you’ll need in retirement.

3. Find out if you’re on track

If you want to figure out if you’re on track now for having the right amount in your retirement account no matter your age, there are several simple ways to get a good idea.

Many investment firms and financial institutions have done research to determine how much to have saved at a particular age, depending on spending and income.

The JPMorgan Asset Management Team reports that someone age 40 with an annual household income of $100,000 should have 2.6 times that amount put away for retirement, and by age 60, that multiple should be 7.3.

If you’re not there, understand that there are multiple ways to get there, not just in a 401(k). Roth IRAs, traditional IRAs, and even Whole Life Insurance policies can all pay out the types of cash you’ll likely need after retirement.

12/22/2022

No matter how you slice it, the truth of the matter is it’s almost that time of year again. Like a lot of you, I’m excited, and even though all of us know the date, there are always some last minute shoppers.
No, I’m not talking about Christmas; I’m talking about tax season!
There are some things you can do – even this early – to get ready for tax season. After all, W2s will be coming out at the end of next month, so why not be ready to file once you’ve gotten them?
For starters, be organized. I find the most frustrating part of filing taxes is trying to corral all the information me and my team need. Once we’ve got it all assembled, the process is always fairly quick. What sorts of things do we need to know?
· Social security number(s)
· Tax ID Number for all corporate entities
· Any applicable W2s or 1099s for other income (1099-INT, 1099-DIV, 1099-K)
· Last year’s tax return
· Other income (not on a 1099)
· Retirement account or IRA contributions
· Student loan interest statements
· Education costs (form 1098-T)
· Home mortgage interest expense
· Charitable donations
· Checking account information for refund or payment
· Health Insurance information
All this assumes that you have the current and correct financial statements and bookkeeping documentation available. As much as I hate to say it, the longer your struggle to put the basics in the above list together, the higher odds yours simple have to file an extensions… and that pushing things out until October!

12/21/2022

Almost every entrepreneur I’ve ever worked with has the challenge of always wanting to build the nest thing and sometimes neglecting to follow up on the current business.

Here are some things to think about when it’s time to launch a new dream, even if the old one is doing pretty good:

1. You’ve found a great problem that needs a solution.

This, by far is the number one reason serial entrepreneurs keep opening new companies. If you’re like me, security makes you complacent. For those of us who are less risk averse and willing to take a chance on your dream, it may be time to think about the world of entrepreneurship.

2. You can’t stop thinking about your potential startup

If you can’t stop thinking about your dream entrepreneurial endeavor enough to focus on the daily demands of your current one, you may be ready to move on.

3. Your support system is in place

Make sure your friends and family know you’re jumping into something that will take up the vast majority of your time. Also, have a set of mentors and advisors on your side, so you can reach out to them when times get rough

No matter what your current situation is – corporate or simply successful small business owner – there comes a time for a lot of us when we think about moving forward into uncharted territory. If this is your goal for 2023, let’s get the ball rolling today!

12/19/2022

Crowdfunding is the process of asking members of the general public for small amounts of money through any one of hundreds of crowdfunding websites.
It is used by both individuals and businesses, and the amount raised is substantial: over $17 billion is generated yearly through crowdfunding in North America.
Is this money taxable?
Contributions made to individuals through donation-based crowdfunding websites such as GoFundMe are tax-free gifts so long as the contributor receives nothing of economic value in return.
Crowdfunding donations made to individuals are not deductible charitable contributions; but contributions made to 501(c)(3) charities through crowdfunding websites are deductible.
Contributions made to individuals or businesses in return for goods or services are ordinarily taxable income to the recipient.
Businesses that use equity-based or loan-based crowdfunding to raise capital do not pay tax on the funds received.

12/15/2022

For the business owner and tax practitioner, the most important part of the Inflation Reduction Act of 2022 was not the tax credit for flashy new electric cars.

It was something much more basic: a long-term budget commitment to help the struggling, failing IRS.

The Inflation Reduction Act gives the IRS an additional $80 billion to spend over the next 10 years. Some $35 billion is earmarked for enforcement.

The IRS may grow by 20,000 to 30,000 employees by 2032, number for revenue officers who collect unpaid taxes could more than double.

The IRS promises that audits of taxpayers earning less than $400,000 per year will remain at historical levels. But this could mean they increase by as much as 400% over their current low levels.

Taxpayers who earn more than $400,000 will be in the IRS's crosshairs in future years. Areas it is likely to focus on include cryptocurrency, S corporation compensation, offshore accounts, syndicated conservation easements, business partnerships.