All Forum Posts by: Brian Boyd

This screams bad tenant all over it. I would not accept the year's rent. If she doesn't meet your tenant profile and pass your screening measures otherwise, why should a year's rent matter? There are other people out there to rent to that meet your credit profile and will be good tenants.

@Ashish Acharya is correct. The regulations on this particular tax matter make it clear that you need to participate 750 hours a year. It would be wise to memorialize your activities each year with a time keeping. Moreover, you should find a new CPA. 

I am a tax lawyer but I am not your lawyer. The information contained herein is generic and not state specific or entity specific. 

Legal Zoom has its place in the market. That being said, most people on this forum are here for a specific purpose: Real Estate Investing.With real estate there are multiple scenarios that require specific clauses or documents to be drafted alongside the Articles of Organization. For example, an LLC in this state (Tennessee) is liable for F&E tax unless you find an exemption and note that exception with the State and the Department of Revenue- it is the difference in a 6% tax or not having to pay it. Moreover, how do you want to be taxed? Partnership, S Corp, or Sole Proprietorship? Do you want a holding company to have multiple companies below it or are you seeking a Series LLC?

There are a myriad of ways to set up, go talk to a lawyer and get some idea of what you really need. Its money well spent.

The answer is "it depends." If you are looking for asset protection from liabilities arising from a potential lawsuit then you will want to strongly consider an LLC. The partnership paradigm of the LLC structure will cleanly split your profits and losses, and allow you to easily manage the asset through its rental life. Talk with your local attorney or CPA to discuss the details further. Good Luck!

The answer to all those questions is "it depends." A single member LLC is a pass through entity that will be disregarded for tax purposes by the IRS. However, your particular state may impose taxes on that entity. Check with your local attorney or CPA for specifics. Moreover, moving the property to an LLC will provide you with the protections of a corporation and limit the liability of that entity to the assets within it as long as you follow the corporate formalities. If you were to keep the asset in your individual name then you place your entire estate at risk. My advice, although I am not your attorney, is go speak with a lawyer. Don't be a penny wise and a pound foolish. You are asking the right questions but you need more details and your local attorney can provide that to you. Good luck!

@Courtney Spencer you need to set up a separate LLC. If you drop it into the same LLC it becomes property of that LLC or it becomes your capital contribution. The easy and clean solution is to set up a new LLC. Keep it simple and clean.

Good luck.

@Christen G. What do you mean you’re not allowed to obtain counsel???

On to the substance, have your documentation of everything you outlined above. Be methodical. Go slow and make sure to paint the picture from the corners in. You want the mediator to see every violation, every damage repair, all the calls, but above all else, show the mediator how you have been responsive and attentive.

Just from the sound of it, I think your mediation is going to be spent with her not with you.

No. Unless she has verifiable sources of income to provide you assurances I would not rent to her. Do not fall prey to sob stories. It will bite you in the rear end. If she can get someone to sign the lease with her as a guarantor then you might consider it. 

@Jesse Stein given the current administration’s desire to eliminate the 1031 exchange and eliminate the capital gains rate by raising it to 39.6%, I encourage you to think about selling now and finding something to reinvest in. Good luck and I’m happy to discuss this more offline.

Justin, 

That is a question with no answer. As you know, "it all depends." However, I would say that a range, based on my experience, would be from 2500- 6500. As you know, the LLC itself does not file a return. Depending on its tax treatment, it may file a 1065 if it is a partnership or it may simply file a K-10 (information return) and provide its members with a K-1. Given that you are in California, I would probably look on the high end of the spectrum. But, please do not skimp on the tax return preparation, it is far too important.

Good luck out there.