Articles

Self-Directed IRAs and Real Estate Rentals

Do you manage a property that is owned by an IRA?  If not, would you like to but are just not sure how? As a property manager, just knowing the basic rules makes you a valuable partner for your owner.  You will find that some owners unintentionally may want to make a decision that will totally cancel out their IRA structure, but if you know the basic rules, you can protect their interests. 

​​​​​​​All management contracts, deeds, and legal documents must be in the name of the IRA and not the IRA owner’s name. When applicable, documents may be in the name of an IRA/LLC.

For the purposes of determining prohibited transactions through a self-directed IRA, the following people are considered disqualified persons:

August 27th, 2019|Articles|

Planning considerations for foreign citizens selling U.S. real estate

Credit: everydayplus c/o FreeDigitalPhotos.net

Options for navigating withholding rules

The first time many Foreign Citizens hear the term “FIRPTA” is from their listing agent when they’re selling U.S. real estate.

Under the Foreign Investment in Real Property Tax Act (FIRPTA), “the disposition of a U.S. real property by a foreign person” is subject to the withholding rules under Section 1445 of the Internal Revenue Code (IRC). That is a massive 15% of the sale price.

While many real estate agents, closing agents and advisors are aware of the FIRPTA legislation, the withholding rules and the various methods of complying can be complex.

Filing a U.S. tax return

Foreign Citizens who own property in the U.S. are not required to file U.S. tax returns unless the property generates rental income or they [Read More]

August 23rd, 2019|Articles|

Rental Safe Harbor Rule:Notice 2019-07, Section 199A

Image by Stuart Miles at FreeDigitalPhotos.net

The 199A rules for the 20% deduction on rental real estate activities was ambiguous, but Notice 2019-07 now provides some ray of light in the form of a key safe harbor rule.

How it works: A rental activity (including multiple rental activities combined into a single enterprise) is treated as trade or business if the taxpayer spends 250 hours of more on rental services. To qualify for this 250-hour safe-harbor, the taxpayer must also meet the following requirements.

  • The taxpayer maintains separate books and records for each rental activity (or the combined enterprise); and
  • The taxpayer maintains contemporaneous records, including time reports and similar documents, concerning hours of services performed, a description of all services performed, the dates on which services are performed [Read More]
July 29th, 2019|Articles|