All Forum Posts by: Bill Walston

Originally posted by Dennis Tierney:

Jon HoldmanAccording to my accountant this is a tax on gross rent, not net. As such it will cost me thousands of dollars a year. It is another penalty on success imposed by the Social Democrats in their war on success in this country.

Dennis Tierney, I am constantly amazed by the appalling advice by some so-called "pros." Being a 'tax geek' I think I'm pretty much up to date on the rules and regs, especially those that apply to real estate investors. Like the others here, I've not heard of ANY changes in the tax law that affects gross rents. Yes, there is a 3.8% tax on NET investment income, but only if it exceeds a certain threshold. I'm calling BS on this info from you accountant until he produces a link to the rule or reg...If he does, then I'll eat crow along with the others :) If he doesn't, you should consider getting yourself another accountant.

Rachael Mabrey, what does the contract say? It sounds as though you and your ex breached the contract but you were allowed to stay in the home by making the same $ payment as rent. On most contracts for deed the owner would have foreclosed and taken possession of the property when you failed to make the balloon payment. In this case, you were allowed to stay in the property (which worked in your favor). I wouldn't think you owe the owners any more than the notice required under your state's landlord tenant laws. To be safe, I would suggest you run this by a good real estate attorney in your area.

John Ferrara, sounds like you have a tax guy who is doing some very strategic planning for you. Just goes to show that you need to be working with someone who knows the ins and outs of YOUR particular tax situation. One strategy does NOT fit all :)

Originally posted by John Ferrara:

Bill thanks for the response. The thing is I'm not sure if his advice is the right way to go. He said from the managing company he will then create a payroll check for me (W2).

W-2 and payroll is a whole 'nother story as they say. I agree with Ned Carey, ask why :)

John Ferrara, while it may sound (and even be) complex, your accountant has suggested this for a reason: it will allow him to properly allocate income and expenses in order to prepare your returns for the various entities. Just from what I see in your post you're going to need a a return prepared for each LLC and each S-Corporation. It's much easier (and less costly for you) to prepare these when proper accounting procedures are followed. Why have this particular accountant unless you think his advice is worth following? :)

Originally posted by Joe Bertolino:

Tennessee Vol, graduate and letterman. We are going to put it on Florida this weekend.

What a game! I really had my hopes up at the end of half :) Ah well, my blood STILL runneth ORANGE :)

Originally posted by Douglas Peterson:

Not every Duke fan only cheers for basketball! I am actually a Duke football fan, too. Go Duke!

Douglas Peterson My dad and brother said their favorite team was UNC & State (respectively) and "whoever was playing Duke." I was the only Duke fan in our household, though I do have two cousins who are Duke grads. I'm sure you can imagine game day around our house :) I now live in the Volunteer State and am a die-hard UT fan but Duke runs a close second!!

Originally posted by Alexander Curtis:

Should I be using postcards or hand written letters for my first absentee owner campaign? Any advice would be greatly appreciated

I personally prefer postcards, but that's just me. I think either would work. It's more important to get your campaign in the mail than to spend too much time worrying about whether to use letters or cards :) Git 'er done!!

Brian Sorensen, the first likely wouldn't cause you a problem (according to my attorney, who was asked a similar question) since you are just stating a fact. You aren't actually soliciting anyone nor asking them to contact you. The second would not fly :)

You should run it by your attorney just to be sure...

Just my .02...

Excellent info from Mitch Kronowit...

The LLC is my entity of choice for holding rental properties so I think you made a smart move there. Since you are a two member LLC your default tax entity will be that of partnership. Since you will have to file a Form 1065 you will need a separate EIN for your LLC.

As Mitch suggested, you need an accountant and attorney that works with real estate investors.