Need income tax advice for the 2x situations below.
Retired married couple (both US citizens) are expected to have rental income and capital gains. While the rental income is somewhat offset by deductions related to the rental properties, there are not much capital losses to offset the capital gains. The capital gains are significantly more than the rental income. What deductions or strategies are available to help reduce the impact of the capital gains?
Non-resident alien (NRA) has real estate in the US, which recently suffered water damage. NRA anticipates receiving insurance settlements for the condo water damage cases. Based on our understanding, individuals no longer get a deduction for attorney fees, which will be significant given that these are contingency cases.
- Can NRA claim this is a real estate investment business given that he is planning to sell the property? NRA is currently restoring the condo for the purpose of selling it.
- Can NRA classify this business as NRA's sole proprietorship, or must NRA create a new business entity for the business to be recognized?
- We believe that the insurance settlements may affect the condo's basis. But will the insurance proceeds also have to be included as NRA's ordinary income in the current year?
- In light of the recent tax reform, what real estate deductions are available for US real estate owned by NRAs? For example, home mortgage interest, property tax, repairs, improvements, etc.
- Similarly, what transactions will affect basis for US real estate owned by NRAs? For example, home mortgage interest, property tax, repairs, improvements, etc.
To be considered, candidates must be familiar with US tax law and should provide their credentials (including either CPA license or bar license information). Preference will be given to candidates with experience with California tax law and/or Taiwan tax law. Thank you.