Jacob Burrill, CPA, Inc.
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General Information
Locality: Kailua-Kona, Hawaii
Phone: +1 808-464-6277
Address: 75-1000 Henry St Ste 206 96740 Kailua-Kona, HI, US
Website: www.burrillcpa.com/
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Do you own a nonhosted vacation rental in Hawaii County? The recent passing of Hawaii County Bill 108 may have serious consequences for you if you own a nonhosted vacation rental in Hawaii County. The county planning department is tasked with drafting the rules and put them out for public hearings before the bill can be implemented.... Why is Burrill CPA giving time to this issue? 1. If you are impacted by this new bill you need to prove you are current on your GE and TA tax filings and payments. If you run afoul of these new rules you may lose the opportunity to continue operate your vacation rental. 2. The loss of the vacation rental operation could impact income tax deductions you may be currently reporting associated with the property. One option would be to convert it to a longterm rental which may allow the deductions to continue. 3. If you decide to just sell the property to avoid the new rules there will most likely be tax implications due to the depreciation that was allowed (deducted) or allowable (not deducted but should have been). The potential tax due from the depreciation recapture may be significant. If you decide to sell the property you will want to consult with a tax professional to determine how it may impact your situation. 4. There may not only be tax implications from the sale of the property and the potential depreciation recapture it may also raise your adjusted gross income to the point of affecting other deductions and credits you currently report. Because each taxpayer's situation is unique, you should hire a tax advisor to discuss your unique situation before you make any financial decisions. It is beyond the scope of this alert to interpret who will be affected by this new bill. It may be best to contact the Hawaii County Planning Department to determine if your vacation rental will be impacted by these new regulations. -Jeffrey Reinert, Tax Manager Burrill CPA, Tax & Accounting
https://www.burrillcpa.com//Dont-Make-the-Most-Common-Tax-
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