Episode 12: Real Estate Taxes: What You Don't Know Can Cost You with Brandyn Cox

Brandyn Cox is the owner of BMC Accounting LLC and is an Enrolled Agent. Enrolled agents, also called EA’s are federally credentialed tax professionals that hold the highest standing with the IRS and have unlimited practice rights. Brandyn founded his company while in college three years ago and the company is now nationwide. Brandyn specializes in small business taxation and real estate tax issues. Brandyn enjoys reading treasury regulations, tax court memos and opinions, revenue rulings, and the internal revenue code to provide the best service possible for his clients.Take-Aways:What Changed with the 2018 Tax Code Update1099A Deduction for Actively Traded Businesses250 Hours of Personal Participation in your business (bookkeeping, tenant leasing, contractors, etc)Make disclosure on tax return to take 20% deductionOnly applicable if you have tax gainsDealer vs. Investor Changes:Dealers subject to self-employment tax while investor only subject to capital gains taxReal Estate Professional (get rid of the passive traded status):750 hours on services provided to real estate activities and more than 50% income coming from real estateIf your business is real estate, have to own at least 5% of the company to have those hours countDepreciation of Rental Real Estate:Up to $25,000 in tax loss against income up to $100k in taxable income$150k in income, no longer applicableNot applicable if a real estate professionalSnapshot Round:                  What is the number one thing you need as a new investor to get started? Understanding Pro-forma vs tax income statements. Understand how taxes will change when you buy or sell.What is your number one thing that real estate investor messes up when getting ready for taxes? Self-preparation of taxes. Leave it to the professionals.What is your dream? Physical offices in multiple states and a large network of military spouses.Brandon's Contact: Website: https://www.bmcaccountingllc.comEmail: brandyn@bmcaccountingllc.com