IRS Audits

Thank you to the 750+ people who said they were willing to step up and take massive action to change their financial future. The first step is the teleseminar on September 27, 2008. I’ve identified at least 5 strategies that every single person could take advantage of before the end of the year to put immediate money in their pocket within a week.

Now, here’s the problem. There were only 200 spots available, so over 500 people had to be told (within 2 hours of sending the email) that the spots were all filled.

The IRS has clearly struck pay dirt in their audits of real estate professionals (at least as far as the IRS is concerned), and so far it looks like the courts are upholding their audit findings.

If you have a loss with your real estate investments, you can take a loss of up to $25,000 against your income, provided your income is less than $100,000. If your income is more than $150,000, you can’t take any loss. Between $100,000 and $150,000 the loss amount phases out. That is, unless you are a real estate professional.

We’ve talked a lot about the more aggressive IRS audits for real estate professionals and real estate investors. I received an email from one of the TL Community members who had just gone through an audit of cell phone usage. And, we have warnings now of increased audits for small businesses, especially Sole Proprietorships, and anyone who has capital gains.

My husband, Richard, gets a call almost every single day from someone who has just gotten an IRS notice or just gone through an IRS audit. And, at the same time, my clients haven’t gotten audited. None of them.

We’ve been posting about the increasing number of IRS audits against Real Estate Professionals and the hard stand they have been taking. Some of the horror stories we’ve heard:

(1) Real Estate Agents denied the REP status because they are not brokers

(2) Hours spent looking at property not allowed because this is considered an “investment”

(3) CPA charged with preparer penalty because he relied on client’s information for REP status

and the list continues.