qbteachmt
Level 15

"if it would be considered an expense for the LLC as the LLC is buying the apartment to rent"

It's not Expense. It's "expenditure" of funds as Investment.

Expense, for instance, is the payment of Electricity = POOF! The money you spent is already gone, because you spent it on something that was all used up.

Investment = you trade Funds or something of Value for Funds or something of value. You invest Money into Real Estate. The Real Estate is the newly purchased Asset.

You know that buying Assets are not an expense. Now you need to teach your clients the same thing. They are confusing Cash Flow with Expense.

And also, explain that selling their own property to themselves, even under the auspices of not marital property, means they report and pay tax the gain on "his" sale, and she holds the property, now, and there was not only no deferral of her tax liability on her commission, but they added the taxable income from his gain into the tax filing for the year.

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