All Forum Posts by: Brittani Gardner

thanks!**

Yeah, I have lived in it since purchase. I was hoping for better news, but U thought I would on be able to only exclude 1/4, that's for the response!

Hi! I'm looking for answers regarding the sale of my 4-family that I have lived in since I purchased in 2015. I have an offer to buy that will leave me a profit of roughly 100k. I plan to purchase a single family home and use the proceeds as a down payment. Is my building exemption from capital gains since I occupied one of four units since owning? If not, can I do anything to avoid capital gains tax or depreciation recapture beside offset with losses (that I don't have)?

@Ben McMahon Well it wasn't my attorney for sure. I can't say that it was for sure done with an attorney. I have seen anything in the contract that is a red flag to get screwed but I will be reviewing it again before signing. I think for future deals, we will be buying the properties jointly, but is it possible for my company to be an owner and as lienholder?

Any advice on this arrangement:

My new partner is a house flipper. I am interested in providing some capital but not all. He has a relationship established with a local lender already. We have a couple deals that we'd like to purchase, flip and split profits 50/50. I put up the down payment and cover holding costs with a second mortgage on the property. He buys the property in his company's name, takes out the first mortgage in his name, manages the project from start to sold and we split proceeds after holding costs and loans are paid off. We also have a JV agreement in place to provide full explanation of the plans, addressing death, taking loss on the property, who does what, etc.

My biggest concern is protecting the profit to be made. The second mortgage would protect my original investment, but would the JV agreement be enough to protect my profit?

Is this the best way to go into business together given our plans with using traditional bank financing to fund most of the project?

@Jon Holdman 

Thanks a million @Jon Holdman! You answers were very clear. So clear that I have more questions now :-)

I was trying to avoid being a landlord. Based on your response, it may be in my best interest to rent it out to benefit from depreciation. My capital gains would not exceed more than 50-75K so I am not worry about tax on that end.

Question: I realize you're not a tax professional, but can you elaborate on the basis and how I would figure out the difference. Specifically regarding the comment you made about "some of the money you receive the return of your basis..."

I am trying to estimate what the offset would be if I collected on a note that would be for $170-180K with 9-10% interest rate.

The whole issue of violating the due on sale clause is about as clear as mud. So many investors do different things that they believe makes them exempt from the due on sale clause in creative financing deals. 

Question: Does putting a subject to deal in a trust really provide protection from the due on sale clause?  If so, could you elaborate on how so.

Last Question: Why would I be less likely to be caught under the Dodd-Frank or SAFE act if this is my one and only wrap/sandwich deal?

Thanks again!

Looking for help on seller financing my primary residence (of 2 1/2 years) when I move out later this year. I have an FHA loan, and have renovated the kitchen.

I am trying to figure out how to structure the deal to make the most sense for income tax purposes.

I assume I still claim mortgage interest deduction on my loan. 

1. Is this the only tax deduction I can claim? 

2. Does depreciation come in to play with deals that are seller financed?

3. How do I handle the income? 

4. What is the difference between note income and rental income?

This is just a starting point, so if I am missing information that would allow some tax professionals, and/or seller financing experts to help answer my questions please let me know - google searches on this subject don't yield great results so any and all help/direction on this matter would help me tremendously.

Hi @Alanna Ti'a! I'm from Columbia, and I miss it -its a fun town!  

How's the progress going?

Thanks Jon!

Seems like some temporary fixes, but eventually boils down to getting the commercial loan.