Tax Question on Notes -- John Behle please help! - Posted by chill

Real Estate Investing
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Posted by John Behle on February 04, 2000 at 20:05:41:

I leave most accounting and tax questions to my own accountant. I can’t give legal or tax advice, but only my opinion.

Expenses are deductible on a business - if you make a profit. It used to be something like 3 out of 5 years, but I’m not certain what it is now. I just focus on making it profitable all years.

If the business has or will turn a profit, then you can likely take the expenses. If not, the IRS considers it a “hobby” and you might now.

Your answer to all these questions needs more specifics. What type of income, how much, did you make a profit last year, the year before, how many notes is “a few”, how much real estate is there?

These are all variables that could influence it. I’d post a more detailed post over on newsgroup 1 where you have some accountants and others that would be far more qualified to answer.

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Tax Question on Notes – John Behle please help! - Posted by chill

Posted by chill on February 03, 2000 at 13:47:31:

In 1999 we formed an LLC (4 partners) with the intent of buying rental real estate and notes. So far we have bought only a few notes. But we acquired expenses for searching out properties and attending the CREOnline Convention.

Now in filing our tax return, we need to decide what type of income we have: 1) business or trade; 2) Rental Real Estate; or 3) Portfolio Income.

What is your advice for what we can do to gain the most tax advantage. Can we clain the expenses mentioned above?
Our LLC has an overall loss for the year which we would like to claim.

Thanks for your help.
C Hill