Pasadena, CA – March 25, 2014

We hope to see everyone back in Pasadena in 2015!

www.IncomePropertyExpo.com

by Thomas F. Scanlon, CPA, CFP®

Subchapter S corporations (“Sub S”), partnerships, limited liability companies (“LLC’s”) and estates and trusts issue form K-1′s. This form documents the stockholders, partners, members or beneficiaries share of their profit or loss from the entity. Don’t wait for this form to get started on your income tax return.

1) K-1′s Aren’t Due Until April 15th

All form K-1′s except for Sub S corporations are not due until April 15th. Sub S corporation K-1′s are due on March 15th. If the Sub S corporation files an extension however, then the K-1 does not have to be issued until September 15th. This April 15th due date makes it very challenging for taxpayers. Their individual income tax return is due the same day. You can’t file your individual income tax return without your K-1′s.

2) We Are Seeing More Amended K-1′s

Investing in limited partnerships, particularly oil and gas that issue K-1′s has become popular again. Just like amended 1099 forms, we have seen an uptick in the amount of amended K-1′s last year. The changes on the amended K-1 may or may not be material. Either way, your CPA will need to review the amended K-1.

3) Let Your CPA Get Started on Your Tax Return

This is key. Get all of your other tax material you have to your CPA. Let them get started. They can rough out the return. This will give you a sense of where you are at. Get the heavy lifting done up front. If you are timely your CPA should have the return good to go. Just add the information from the K-1 and the return should be complete.

4) You May Have to Go on Extension

The 2013 individual income tax return, Form 1040, is due on April 15, 2014. If you can’t file on time because you did not receive your K-1 timely, you will need to file an extension. This is done on Form 2848, Application for Automatic Extension of Time to File U.S. Income Tax Return. A properly filed extension request will extend the due date to file until October 15, 2014. The extension only extends the time to file the return. It does not extend the time to pay any tax due. Any tax due needs to be paid by April 15th. Failure to pay the tax then will result in interest and penalty.

Thomas F. Scanlon, CPA, CFP® is with Borgida & Company, P.C., Certified Public Accountants in Manchester, Connecticut, celebrating 44 years of tax, advisory and accounting services. Please call (860) 646-2465 or email toms@borgidacpas.comif you would like more information.

American Apartment Owners Association | Company Website | Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

The National Association of Realtors® expressed “extreme disappointment” over several of the provisions contained in U.S. House Ways and Means Chairman Dave Camp’s tax reform draft released yesterday, namely proposed limits on the mortgage interest deduction and capital gains, and the repeal of deductions for state and local property taxes.

The NAR says these proposed changes to the taxation of real estate will impact every single American, either directly or indirectly.

“NAR supports reforms that promote economic growth, but we strongly oppose severely altering the rules that govern ownership and investment in real estate. Real estate powers almost one-fifth of the U.S. economy, employs more than 17 million Americans, and contributes a quarter of all federal and state tax revenue and as much as 70 percent of local taxes,” says NAR President Steve Brown.

The group will carefully analyze the details of the Chairman’s plan to determine the best way to educate Congress and the public about how this plan would impact the owners, consumers, and producers of both residential and commercial real estate.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

1) Be Prepared
Ah yes, the Boy Scout Motto, “Be Prepared”.  It is very applicable to surviving tax season. How can you get prepared?  Start with completing your tax organizer.  We send these out to our clients in early January.  This will contain all of the prior year information.  Some clients don’t like filling out the tax organizer.  That’s fine. Just organize your records as best as possible. Try to get all of your material together.  Finally, schedule an appointment with your CPA early during tax season.

2) Be Patient
Expect delays from the Internal Revenue Service (“IRS”).  This is nothing new.  We can’t really blame them. It really comes down to Congressional action. Or inaction as the case may be.

Also, expect amended Form 1099′s. This seems to be happening more frequently, particularly later in tax season. If you have had amended 1099′s in the past, let your CPA know.  They may want to complete your returns but request that you don’t file them until later in the filing season.   This may avoid having to file an amended return. It’s like what any veteran carpenter will tell you, “measure twice, cut once.”  Well said.

You may be asking yourself “Where’s my K-1?” People who have invested in Partnerships or Subchapter S corporations need their K-1 to report their portion of the profit or loss on their individual income tax return.  Unfortunately the K-1 forms are not due until April 15, the same day the individual income tax return is due. Don’t wait for your K-1′s. Give all of the tax material you have to your CPA and let them get started on your return.  You can just forward the K-1 to them when you receive them.  This will increase the odds of your return being filed on time.

3) Be Proactive
While you need to be patient, you also need to be very proactive. While 2013 may be in the books, it’s time to start addressing your tax planning for 2014.  This could be something as simple as maximizing your contribution to your 401(k) plan at work.  Taxpayers are allowed to contribute up to $17,500 into their 401(k) plan in 2014.  Taxpayers age 50 or older can contribute an additional $5,500 in a so-called ‘catch up’ contribution for a total of $23,000. Or perhaps your employer has added a Roth 401(k) plan feature to the existing 401(k) plan.  This might be something you should consider allocating a portion of your 401(k) contributions to.

American Apartment Owners Association | Company Website | Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Apartment News Publications Inc. is teaming up with the Income Property Management Expo to provide Apartment Owners/Managers & Commercial Property Management Companies with tools for efficient, cost effective management, operation and maintenance of their communities & facilities!

Join us May 7, 2013 for the Southern California Income Property Management Expo at the Ontario Convention Center!

Click here to Pre-Register Online!

Southern California Attendee Information:

• Apartment Owners
• Property Managers
• HOA
• Commercial Property Management Companies
• Service & Maintenance Staff
• Industry Partners & Vendors

This expo will host FREE seminars throughout the day addressing CA Energy Efficiency Programs, Landlord Legal Updates, Tax Code & 1031 Exchanges, Property Maintenance and more!  The goal of the Expo is to provide attendees with the opportunity to network with other industry professionals while enjoying fine food tastings, the PGA Experience, Luxury Car Display & Test Drives, raffles & giveaways and the expo floor which will have over 100 exhibitors!

To learn more about the Income Property Management Expo, how to attend for FREE, or learn how to reserve a booth for the Expo Floor, visit IncomePropertyExpo.com!

@IPMExpo

By: Christopher Miller

“In Your 1031 Exchange, Pay Attention to Your Debt Replacement Requirement”

One of the most important parts of a 1031 exchange seems to be the least understood, so I am devoting this month’s article to one important detail:  Debt replacement needed in your exchange.