Hey fellow LLs. We need some EOY expenses and right quickly, too.

We have some big expenses coming up but they definitely CapEx, no way around that. And no hurricanes this year to add to repair costs (not that I'm sad about that, mind you!!)

I'd rather write a check to fix up a space than give it to the government to waste.

What are some of your EOY ideas for (legit) expenses/supplies?

W,

I don't worry too much about Dec 31 deadline because we'll still need deductions next year, but I can't resist!

Lowes gift cards.

Printer cartridges and other office supplies.

Real estate books and courses.

Church. I'd rather give the money to my church where it will do some good than the IRS.

BRAD

Do gift cards count? As what? Supplies?

Good idea about office expenses. DH has been limping along on an ancient Dell that can't even run our floorplan software, we actually have to dial into our son's house up in Virginia to run it LOL! Time to upgrade.

The only reason to buy stuff before year end would be if you really need it sometime soon (6 months or fewer); otherwise, you're just storing stuff that can become obsolete, start rusting, start the clock ticking on the warranty, etc. There's a reason why wise businesses went to "JIT" (just in time) inventory: it costs to store stuff and stuff wears out, gets old, gets wet, gets stolen, gets tripped over, etc.

The only reason to buy stuff before year end would be if you really need it sometime soon (6 months or fewer); otherwise, you're just storing stuff that can become obsolete, start rusting, start the clock ticking on the warranty, etc. There's a reason why wise businesses went to "JIT" (just in time) inventory: it costs to store stuff and stuff wears out, gets old, gets wet, gets stolen, gets tripped over, etc.

You can buy gift cards to restaurants to give to your tenants {and accidentally buy too many} . . . . (advertising / good will expense)

Add insulation to some of your properties. Just in time for winter. (repair and maintenance)

You can buy gift cards to restaurants to give to your tenants {and accidentally buy too many} . . . . (advertising / good will expense)

Add insulation to some of your properties. Just in time for winter. (repair and maintenance)

You can buy gift cards to restaurants to give to your tenants {and accidentally buy too many} . . . . (advertising / good will expense)

Add insulation to some of your properties. Just in time for winter. (repair and maintenance)

We happen to be one of the few affected by the ACA cliff. Make $1 too much and you repay every bit of the subsidies to the government. There are not that many like us out here. 99% of the people on ACA get subsidies. But if you tip of that cliff by even one dollar, you have to pay back every dollar. In our case, it's $25,200.

If we reduce our taxable income by $1 under the cliff, we only have to pay $2500.

Not that this helps much but.....

Was just in Home Depot & they were clearancing some 24" vanities with tops. White with a shaker type door. I've got a couple small bathrooms on the to do list shortly after the first of the year. Marked down to $49 so I took the 3 they had.

The Mr. found a small blower type fan.....the kind like Service Master sets when drying a place out except they are a much smaller footprint. Some type of "Special Buy" at HD for $60. He got 1 yesterday to try it out & it definitely moves the air. Will likely go back for a couple more of those.

He's got a tool list for replacements that will get taken care of before the end of the year. Dropped his utility locator on Monday morning & did something to his sewer camera on the same job so those will be some big expenses to repair or replace I'm sure. Just bought a new to us paint sprayer last week-end. Really.....at this point the hemorrhaging needs to stop.

Pre-pay property taxes.

What about some spare or replacement window AC units if you provide (or need backup if central AC goes down)?

I can relate to the ACA situation you are in. I did lower the amount of credit I will be using in 2018 as income is projected to go over. Also, you can make additional payments during the year if you are exceeding the maximum.

Unfortunately these are good problems to have since you are making money!

i once bought a "viewing monitor" for my office. From time to time I do use it as my computer screen but it came in a box like a flat screen tv would.

Computer would be a nice write off,,, update your phones? Anything for your office, floor heater ? Decorating? rugs?

If you want to spend a lot of money fast, invest in legal or tax services. Set up a trust, update your will, confer with a tax advisor.

Do any of your properties need new concrete work?

Proactively purchase a water heater or two for spares?

How about preparing utilities, phone or internet?

WOW, I can think of all sorts of tools I need or want to replace. If I had a certain amount I am sure I can use it.

New batteries for the tools, well new tools because the batteries cant be replaced because they are so old. That riding lawn mower, a rototiller, weedwacker, leaf blower, shop vac. you can always use one of those. Stock up on a case of electric outlets, switches.

The standard rules apply defer income and accelerate expenses. In our case, no one is interested in "deferring income" as that means a deadbeat tenant, so that only leaves us with the expense side of the matter. There are a couple of things LL's need to be aware of:

1) De Minimis Safe Harbor for Repairs: Whether someone has to be capitalized and depreciated or deducted as a repair is usually a bone of contention. Most of us would prefer to deduct repairs currently. As a general rule, you're required to capitalize and depreciate those expenditures that adapt a property to a new use or extend the life of the property. Under this De Minimis Safe Harbor, you can deduct as repairs any item not exceeding $2500 without worrying about whether it falls into the definition of a capital item. This is an election that must be made on a timely filed return.

2) I generally like deductions that involve me merely changing cash from one form of savings to another. A SIMPLE IRA is a good thing to fund, however, this only works with earned income and high enough regular tax rate where the deduction into the plan is more than the self employment taxes one would have to pay on management fees. (The only way a real estate investor can set this up is to establish earned income via management fees charged to your rental). With a SIMPLE, the contribution is determined simply by the dollar amount you wish to contribute. For example, the maximum SIMPLE contribution for someone over age 50 is 15,500 for 2017. If you have earned income equal to this amount, you can contribute the entire amount to the SIMPLE, but this only yields savings if your regular tax bracket exceeds the rate of the self employment tax of 15.3% as the SIMPLE contribution only reduces the regular tax not the self employment tax. In essence, your regular tax bracket has to be above 15% for this strategy to be effective.

Of course, the caveat with all of this is to check with the professional who is familiar with your circumstances as taxes is one area where one size definitely doesn't fit all.

Thanks all for the update on the expense caps. I like to expense repairs :)

Office supplies. New file folders for your 2018 files. Printer ink, printer paper. Stamps, prices are going in in January. Trash bags. Pay your insurance and taxes. Renew your PO box. Pay for any subscription services.

Thanks for all the suggestions! We've done all of the pay ahead and pay extra things. Yes we do have an RE-savvy CPA and just had our year-end consult yesterday, which is why the question!

Next year we will reduce subsidies as our income has certainly gone up and next year two more units go online so there you go.

We will be buying some appliances for sure, and maybe upgrade DH's phone which is an old barely usable paint covered dinosaur (really I will get the new phone and he will get my old one LOL!)

For me, any gubmint subsidy becomes a Dance with the Devil. I took a hard look at even using accelerated depreciation, bonus depreciation, and section 179 expensing, and decided those all are not for me. Sure, I get lower income this year, but what about next, and after that? Spouse will have his salary , at a job he loves for a few years yet. All of those accelerated depreciation expenses, for us, would just mean having to finagle ways to lower income in the future.

All of these little lawmakers tricks, just to get us to scramble and spend money that we otherwise wouldn't. I too have bought extra supplies when they were on sale, only to have their physical presence impede productivity. Very frustrating.

Busy, you are right of course. But attaining wealth isn't just about how much you earn, it's also about how much you are allowed to keep.

Next year our income will clearly be higher so no dancing around. And actually who knows what will happen with Health Care anyway? But for this year, we'd like to stay this side of the stupid cliff. Why that "penalty" isn't graduated makes no sense whatsoever.

WNC , it is so frustrating with any of the government aide programs. When my daughter and her husband were finishing school and starting family, they hit a lot of those cliffs. I'm not one to use any type of outside help, but I have realized it's been dumb luck more than anything that has kept me out of need. Their use of those programs really opened my eyes.

#22, yes we do use cost segregation already. All insurance and property taxes included and lined up to be paid by 12/31/18 (scheduled online.) And an extra mortgage payment on the one remaining mortgage as well, but that's well into the term so principal outweighs interest these days.

Not much deferred maintenance out there which is good AND bad of course.

We could replace some windows at a few of the cottages, easily under the 2500 Safe Harbor but could add up nicely, and should be done anyway. Although I know everyone here screams no windows are a waste of money...

W,

No snowblower. You need a SAND blower!

BRAD

Upgrades like hurricane shutters? New faucets, vanities, doors, water heaters...