Do you use the same LLC for multiple properties or create a new one for each property? I'm looking at getting into real estate investment and wondering what the best approach is.

I use separate LLCs for each property. This creates the strongest liability barrier between properties. If there's a lawsuit at Property A that exceeds insurance coverage, they can only go after that specific LLC's assets (that property), not Property B or C. Some people use one LLC for multiple properties to reduce fees and paperwork, but that defeats much of the purpose - if there's an issue with one property, all properties in that LLC are exposed. The extra cost and paperwork is my insurance beyond insurance.

Both handle single member LLCs fine. For federal taxes it's actually super simple - you just file Schedule C with your personal return, exactly like a sole proprietorship. There's no separate tax return for a single-member LLC unless you elect to be taxed as a corporation.

What kind of detailed records do you recommend keeping? Is a credit card statement enough or do I need actual receipts for everything? I'm terrible at keeping track of paper receipts.

Credit card statements are a good start, but they're not enough on their own. The IRS wants to see the business purpose of each expense, which doesn't show up on credit card statements. I use a combination of methods - I take photos of paper receipts using an app that stores them digitally, save PDF receipts from online purchases, and maintain a spreadsheet where I note the business purpose of each purchase. For software subscriptions, I note what each one is used for in my business. The key information you need for each expense is: date, vendor, amount, what was purchased, and specific business purpose. Digital records are perfectly fine - you don't need to keep paper copies as long as your digital records show all this information.

What's this $2,500 threshold you mentioned? Does that mean I can deduct equipment purchases up to $2,500 immediately without depreciating them? That would be super helpful to know!

Thank you so much for this! I didn't know we could check our transcripts online. Is it hard to set up an account? And will it show all three stimulus payments or just the $1400 one?

Setting up an IRS account isn't too difficult, but you need to verify your identity with some specific documentation. You'll need a photo ID, social security number, tax filing status, mailing address from your last return, and some financial account that can be verified (like credit card, mortgage, loan, etc.). The transcript will show all stimulus payments you received, not just the $1400 one. Look for the 766 code with dates in 2020 and 2021. The first payment was $1200, second was $600, and third was $1400. If you're missing any, that's what you would claim on an amended return for the appropriate tax year.

I filed my amended return in January for the missing stimulus and just got my refund last week, so about 5 months total. The online status never updated though! It still says "processing" even though I got my check already. The IRS systems are super behind on updates.

Does ProSeries handle the Canadian portion as well? I have K1 income from Canada and I'm completely lost on how to report it properly. My limited partner status includes operations in British Columbia and Ontario.

ProSeries does handle foreign income reporting including Canadian-source income. It will create the necessary Form 1116 (Foreign Tax Credit) based on your K1 information. For the Canadian portion specifically, it asks for the province where the income was earned and automatically applies the correct tax treaty provisions. There is a slight learning curve with how to enter the information, but they have decent support that can walk you through it. I've found their knowledge base particularly helpful for foreign income situations. One thing to note is that you'll need to convert any Canadian dollar amounts to USD using the yearly average exchange rate published by the IRS.

Can you explain the basis tracking a bit more? I became a partner in 2023 and received my first K1, but I don't understand how to track my basis. The partnership gave me a capital account on the K1, but is that the same as my basis?

Wait, really? I didn't know CPAs could be forced to testify. Does that mean anything I tell my CPA could be used against me if I accidentally did something wrong on my taxes?

It's a bit more nuanced than that. CPAs do have a limited privilege in certain non-criminal tax matters, but it's not as broad as attorney-client privilege. Generally, if criminal tax issues are involved, a CPA can be compelled to testify. This doesn't mean you should be worried about normal tax planning discussions with your CPA. For typical tax preparation and planning, this distinction rarely matters. It only becomes important if there's potential criminal tax evasion or fraud involved. For most people with legitimate tax questions or mistakes, this isn't something to worry about.

This matches my experience too. My CPA charges $200/hr for business consulting but my tax attorney was $450/hr when I needed help with an IRS dispute. The attorney was worth it though because they got the penalties reduced significantly.