Using money from your IRA to purchase real estate has quite a few pitfalls. Here are the risks: If you use IRA money to buy real estate, you cannot live or work on the property. There can be no “self-dealing”. You can’t physically invest your personal efforts into fixing or rehabbing the property. Even if you normally do your own construction work, you can’t do that if you used IRA funds to purchase the property. Losses from the sale of real estate are not tax deductible. Loss of rent is not deductible. You can’t claim depreciation and amortization on your tax returns. The cost of any repairs to the real estate must be paid from IRA funds. You can’t use your own money to pay for repairs. You can’t even loan money to your IRA to pay for repairs. If you are using the property for rental purposes, you MUST… read more →
Single-member limited liability companies, or LLCs, can be a great tool for real estate investments. Here’s what you need to know: 1. You don’t have to file separate tax returns for your single-member LLC. The LLC becomes a disregarded entity for purposes of federal income tax. If you own rental property in a single-member LLC, it gets reported on your personal income tax return (Form 1040). And if the single-member LLC is owned by some other entity, like a partnership, the LLC’s taxes are reported on the partnership’s income tax return. 2. You do, on the other hand, have to file federal payroll tax returns for your single-member LLC. If you have employees on payroll, you’re treated just like a corporation for purposes of payroll tax returns. 3. You have liability protection, similar to the liability protection you would get it if you were a corporation. If you own an… read more →
The Cook County Assessor’s office has posted its 2017 exemption applications for Cook County homeowners. The following 2017 exemption applications can be found there now: Homeowner’s exemption Senior exemption Senior freeze Disabled person’s exemption Disabled veteran’s exemption If you qualify for any of these exemptions for 2017, you should apply immediately. To qualify, you must fall into the relevant category as of the 1st day of 2017. For example, if you are trying to claim the homeowner’s exemption, you must have lived in the home on the 1st day of 2017. If you are trying to claim the senior citizen’s exemption, you must have lived in the home on the 1st day of 2017, and you must have been born in 1952 or earlier. If you are trying to claim a senior freeze, then in addition to meeting the senior exemption requirements, your household income for… read more →