April 8, 2024

At the beginning of the year, we all set goals to better ourselves and our businesses. However, by the time the first quarter comes around, we tend to find ourselves falling off track. Are you feeling stuck in your old habits and are looking for ways to get back on schedule? We put together the following guide to help keep key goals at the forefront of your mind when it comes to working in the real estate and hospitality industries.

Ask Your CPA

In the What to Ask Your CPA series, we covered a variety of questions that are important to be discussing with your team of tax professionals. Maintaining a year-round relationship with your CPA is a great way to make sure you’re not leaving money on the table, so you should be starting those conversations now if you haven’t already. Some potential topics to discuss with your CPA include:

  • Are net losses from my real estate activities able to offset other items of income? By understanding the different types of loss limitations, taxpayers can minimize their tax liability and maximize their deductions. This article covers tax basis limitations, at-risk basis limitations, passive activity loss limitations, excess business loss limitations, and provides examples of these four loss limitation tests.
  • Is my entity subject to business interest limitations? This article summarizes and analyzes the rules of interest limitations within Internal Revenue Code 163(j). We have also highlighted and answered some common questions when it comes to interest limitations, such as whether to elect out as a real estate trade or business.
  • Would a like-kind exchange help diversify my real estate portfolio? A like-kind exchange presents the opportunity to diversify your real estate portfolio by exchanging one investment property for another. This article explains what a like-kind exchange is, how to perform one, and how you can benefit from this strategy.
  • Should I get a cost segregation study on my property? If you or your company have constructed, purchased, or remodeled any real estate, a cost segregation study may be an option for tax savings. This article outlines what a cost segregation study is, how it works, how you can report results, and what benefits you can expect to see.

BOI Reporting

To combat money laundering and illicit financial activity, Beneficial Ownership Information (BOI) reporting is now a requirement for companies to complete under the Corporate Transparency Act. It is important for your business to be able to properly report company information, complete reporting processes in a timely manner, and avoid reporting penalties. We’ve written this article to best introduce you to the topic of BOI reporting, but please let us know if you have any questions on this fairly new requirement.

GAAP Assurance

It is also important keep in mind in GAAP Accounting Standards regard to your business plan throughout the year. Some key areas of concern include updates to Topic 842 lease standards, providing insight to navigating lease existence and classification, along with other updates; credit losses (CECL), which now has a new requirement to project future losses; and how investments in tax credit structures should be recorded.

Affordable Housing 45L Tax Credits

If you are an affordable housing developer, we have great news for you. There has been a significant expansion to 45L tax credits, with tax credit now being set between $2,500 to $5,000 per unit compared to the previous range of $1,000 – $2,000. Additionally, 45L credits no longer reduce basis for calculating Low Income Housing Tax Credit (LIHTC), so all affordable housing developments can be candidates for both credit programs. Clark Nuber has partnered with KBKG to provide you with comprehensive evaluations on your eligibility of 45L credits.

All this to say…

The best way to make sure you are set for success in the new year is to meet with your CPA to discuss your upkeep to changes in regulation and expectations, and strategic moves for growth and saving within your business. If you have questions about how to best navigate business in the new year, contact our real estate and hospitality tax professionals. We look forward to speaking with you!

© Clark Nuber PS, 2024. All Rights Reserved.

This article contains general information only and should not be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action, you should engage a qualified professional advisor.