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

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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|

Featured on American Dream TV show-FIRPTA Discussion

Take a look at my segment discussing FIRPTA issues.

July 29th, 2019|Press|

How many properties should you hold in one LLC or LLP?

There is no correct answer here.  This is all about your personal tolerance for risk.

However, the purpose of an LLC/LLP structure is asset protection.  The overall strategy should be to segregate assets.  Therefore, if you have all of your properties held in just a single LLC/LLP entity and you are sued, all of the properties would be subject to a judgement creditor in a court approved claim against you. With that in mind, is it wise to have multiple properties in a single LLC/LLP?  Many individuals will do so because they do not want to pay the annual fees and deal with the administration of multiple LLC/LLP entities. In the long run though, it would be in your best interest to break up the assets into separate LLC/LLP entities and just view the additional annual fees as added “insurance” in the event of a lawsuit. In this scenario, if you [Read More]

August 12th, 2018|Articles|