Posted by JHyre in Ohio on February 02, 2002 at 12:54:49:
I would credit cash (it’s a debit account) and debit retained earnings or paid-in-capital.
John Hyre
Depreciation Question - Posted by Tom(Dallas)
Posted by Tom(Dallas) on February 01, 2002 at 19:37:25:
If one of you gentlemen could help me with a question.
Perhaps I have completely missed it but I have searched the archives and cannot get a straight answer.
Doesn’t a llc get to utilize all of it’s depreciation? In other words, an individual cannot offset any ordinary income with a real estate loss due to depreciation, when their income is over $150,000. But if I’m in llc, and real estate investing is my business, can’t I offset income from the sale of property with depreciation from other properties?
For example:
Profit from sales…$200,000
Depreciation from homes…$210,000
Loss…$10,000
Now can I receive the $200,000, let the llc realize a loss, and not pay taxes or do I have to pay taxes on whatever I receive? If so, what is the purpose of depreciating the property if I can’t defer the taxes?
I could be that I’m just not looking at this right. Please show me where I’m off.
Re: Depreciation Question - Posted by AJ Malik
Posted by AJ Malik on February 02, 2002 at 09:07:42:
How collect on Delinquent Mortgage paper ? How do I find Buyers ? Do I need to get legalized documents ?
How do I estimate a quote & still be able to make some
money , with little or no money ?
Re: Depreciation Question - Posted by JHyre in Ohio
Posted by JHyre in Ohio on February 02, 2002 at 05:58:38:
Run a search on the main board on “passive losses”. The general principles apply to you, the LLC makes no difference. Asuming that you are dealing with rentals, which are per se passive, and you make > $150k, then the $10k excess PALs (passsive activity losses, ironic abbreviation) can offset other passive income OR can offset normal active income IF you qualify as a “RE professional”…which basically means that you need to have spent at least 751 hours of your time during the year doing RE related things, and at least 1/2 of your time spent providing services must have been spent in RE.
John Hyre
Re: Depreciation Question - Posted by Tom(Dallas)
Posted by Tom(Dallas) on February 02, 2002 at 11:07:23:
John,
Thank you very much. That had been bugging me for a while.
A follow-up question- What would I call the cash that I take out, that taxwise, has been offset by depreciation? Another way to say it would be- If I debit the cash account, what account do I credit?
I eagerly await your response.
Tom