Sebastian’s Recent Posts

What is a Self-Directed IRA in Real Estate

Self-directed individual retirement accounts (SDIRAs) can have some potential benefits compared to traditional employer-sponsored retirement accounts, especially for experienced investors. 

Feb 22, 2023

Can I Use Rental Income to Qualify for a Mortgage?

In the wake of the national housing crash that began way back in 2007 as a result of lax mortgage lending standards, obtaining a mortgage has become much more difficult as lenders tightened their underwriting criteria. 

Feb 18, 2023

How to Sell Farmland Without a Realtor

Farmland owners who choose to sell their land holdings often engage brokers or realtors with extensive experience selling farmland to help them navigate the sale process. 

Feb 14, 2023

Can Capital Losses Offset Ordinary Income?

Ordinary income is, quite simply, what you earn from providing products or services to others. The wage or salary your employer pays you falls under the category of ordinary income. Interest income from bonds also falls into this category. If you’re retired and taking withdrawals from your defined contribution plan, that withdrawal is also considered ordinary income.

Feb 10, 2023

Do You Have to Report Capital Losses?

Capital losses can help offset other income. This might be income from capital gains or even ordinary income. However, there are certain restrictions to these income offsets. The net capital gain or loss must be calculated as a first step. If the net is a loss, does that require reporting? Is it not like you will be taxed on a loss, right? The answer is more complex than it may first seem. 

Feb 6, 2023

What is a Springing Power of Attorney?

Designating a Power of Attorney (POA) can be an essential and productive tool for managing your financial and other interests. However, the term also causes confusion, partly because there are different varieties of POAs and partly because various jurisdictions use different definitions and procedures.

Feb 2, 2023

What is Pro Forma in Real Estate?

The Oxford Language Dictionary definition of pro forma is "done or produced as a matter of form" or "a standard document or financial statement.” Similarly, the original Latin meaning is “for the sake of the form.” In contemporary usage, a Pro Forma is a cash flow projection for real estate investments. Pro Formas are typically forward-looking estimates of financial results. Real estate investors rely on the pro forma to analyze potential income and expenses.

Jan 29, 2023

Can Distributable Net Income (DNI) Exceed Taxable Income?

Distributable net income (DNI) is a tax deduction allowed by trusts. DNI must be calculated to determine its value. Part of the DNI calculation includes taxable income. If taxable income is part of the DNI calculation, does that mean taxable income is always equal to or less than DNI?

Jan 24, 2023

What Can Offset Depreciation Recapture?

Depreciation can be an extremely favorable and advantageous tax benefit for real estate investors.  Depreciation is a tax deduction that allows property owners to lower the costs associated with purchasing and making improvements to income-producing properties. This deduction lowers the amount of taxable income (but not cash flow) generated from rental properties. 

Jan 20, 2023

What Does a Qualified Investment Mean?

Are you contributing to a retirement plan with your employer? If so, then you are likely utilizing a qualified investment. Qualified investments include 401(k), 403(b), 457(b), SEP-IRA, and SIMPLE IRA plans. These plans follow IRS rules and restrictions. They also have tax benefits. Keep reading to see what these plans are all about.

Jan 11, 2023

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