All Forum Posts by: Bill Walston

Originally posted by dj0007:

So if i understand been that "Mike " will be getting the property from "John" and john been a principal of the corp then "jimmy" won't necessarily have to sign the deed . And the "Grantor" in the deed will be "Mike" and no "ABC Company"?
Am i correct on this?

Thanks guys for your help

No, you are not correct. Right now, ABC Company, a corporation, owns the property, not Jimmy and not John. "Mike" would not be getting the property from John, even if John is the one who signs the deed. Only ABC Company can transfer the property to "Mike." On a deed, ABC Company would be the grantor and "Mike" would be the Grantee. An authorized individual (John, Jimmy, or anyone else authorized by the shareholders of the corporation) would sign the deed on behalf of the corporation.

That being said, you need to consult both a good real estate attorney and your tax pro. As Charles has emphasized there are tax consequences to what you are proposing, irrespective of your contention that there is no "sale value in the transaction."

Originally posted by Mitch Kronowit:

I keep asking this question as well. So far, no answer.

There are times when a Quitclaim may be useful, but not when transferring property from seller to buyer in a traditional property sale. They are most often used to transfer property between family members, to place property into a business entity (and vise-versa), to place property into a trust or in other special circumstances. I see them most frequently in a divorce situation where one spouse terminates any interest in the jointly-owned marital home and grants the receiving spouse full rights to the property.

And since a Quitclaim only transfers any interest the Grantor may have, I'll sell you my part of the Brooklyn Bridge for the right price :wink:

Originally posted by dj0007:

Property was quick claimed a few years ago to a corporation "ABC company" ,"John" and "Jimmy" owns the corporation 50/50 ...Now property will be Quick claimed to "Mike".....In the Quick claim who is the Grantor?

1- ABC company
2- john and Jimmy
3- Just John
4- ABC Company + John + Jimmy

and should John and Jimmy both sign the deed or just one signature will be enough.?

ABC Company would be the Grantor. The deed usually is signed by the President of the corporation, but can be signed by any individual given authority to sign for the corporation.

May I ask why use a Quitclaim deed instead of a Warranty deed? The Quitclaim contains no title convenant and offers no warranty as to the status of the property title; the grantee is only entitled to whatever interest the grantor actually possesses at the time the transfer occurs.

Is Mike purchasing the property from the corporation?

If you need to add an additional LLC, why not do it yourself? Once the main "cell" is formed and filed with the state, all others should only be internal documentation. Each new "cell" will need its own operating agreement, accounting records, EIN, and separate bank account. I would venture to guess that the operating agreements of the five that you now have are very similar and can be used as models for any that you add to the series.

Originally posted by Steve Babiak:

Originally posted by Chris Weiler:

According to my CPA, you do not have to file a separate tax return for each LLC if it is single member. It is a direct pass through to your personal taxes.

That may be true for Federal taxation, but each state will have a different take on whether a tax return for the LLC is to be filed or not.

And it's true for Federal tax purposes only if you accept the default status of treating the LLC as a sole-proprietorship for tax purposes. If you elect to be taxed as a corporation a separate return will be required.

Of the two, I prefer ListSource for the same reason as Kobus. You just can't beat how well you can target your list. And the customer support is OUTSTANDING.

Originally posted by Robert Littke:

Tax Question, Can rental income from a property owned by a group of investors in an LLP be distributed as dividends? Thanks for the help.

Robert, if your question is, can available cash be distributed to the partners of an LLP, the answer is absolutely. It will not, however, be considered a dividend. As others have pointed out, dividends are distributed only by corporations. As a partnership, the LLP will simply distribute the cash to the partners and account for it as an adjustment to the Partners' Capital Accounts.

Originally posted by sportf190:

Ok so I have my first rental and now I am trying to get in the act of wholesaling and working on my marketing. I have a DBA and a business debit card, but if I am sending out letters, buying lists, these are all tax deductions right? I should put them on my business card too? thanks

Yes, these are all deductible expenses. They should be paid from your business account whether by check or by debit card. That's just good accounting :-)

Originally posted by Jimmy C.:

But if people dont like the real me, then buck em. Ya know?

Now doesn't that just give a whole new meaning to the phrase "one buck deals"??? LOL

Originally posted by Aaron McGinnis:

As a flipping entity, you may not want all profit and loss to pass through to you. You may want it to stay in the company instead to allow for better autonomous evolution.

A couple of issues I see with this: 1) If the "profits" stay in the company, they will be taxed at the corporate level, and then again if distributions are made to the owner; 2) losses that pass through to you can be used to off-set other income; if they stay in the company they cannot.

Originally posted by Aaron McGinnis:

To put this in another way - an S corp has no retained earnings. This may make building a capital base challenging. Yes, you could continue to buy stock every year with the income passed to you on a K1 statement in order to increase the value of the corp... but that may look wonky to an outside entity if you ever want to, say, get a credit card, surety bond, or line of credit.

This is not quite right. The S-Corporation designation is a tax issue rather than accounting issue. S-Corp financials are no different than those of a C-Corp.

There are some "internal" schedules that need to be maintained in order to track the shareholders' basis, but this does not affect the reporting to external users of the reports. If your corporation is profitable an S-Corp designation should not prevent your getting a credit card, surety bond, or line of credit.