All Forum Posts by: Bill Walston

@Richard Adjou, to the contrary, it DOES matter all that much. If your LLC DID elect to be taxed as an S-Corp then it should be filing Form 1120S and NOT Form 1065 which is the default tax structure for a multi-member LLC. And you should file a return to take advantage of any of the expenses you may have incurred even though you may not have much, if any, income to report. If you are using a tax pro, he/she should be able to tell you what forms need to be filed annually - be sure to ask.

Hi @Melanie Henry - I've done several MLO deals. Talk to the seller to find out his/her motivation for selling. You need to show the seller how a MLO is going to benefit him and solve his problem. After all, his initial objective is to sell and you need to show him how you can can solve his problem with a master lease and option.

@Ken Rishel, I beg to differ.  No where did I say that provisions inacted PRIOR to Dodd Frank wouldn't apply.  However, @Curt Smith was questioning specfically the ATR provision of Dodd Frank. ATR was addressed specifically by Dodd Frank (not the SAFE ACT or any other) and can only apply after the effective date.  There was no grandfathering clause making ATR retroactive.  So, while other acts and provisions may apply to the acquisition of pre-2014 notes, DF does not.

First, any CFD originated prior to January 10, 2014 should not be an issue. Dodd Frank only applies to notes originated AFTER that date. @Curt Smith , you are right to be concerned about the transfer of risk.  The THEORY is that the risks and obligations of Dodd Frank will transfer to the assignee or holder of the note.  (I say theory as I've not seen this yet adjudicated in court.)  The entity control question is a bit more complex because the Act simply DOES NOT address the issue.  Most attorneys who I have consulted hold (and my own research supports) that each entity stands alone and you can do up to 3 deals per entity before having to use (or become) a mortgage loan originator.  That could very well change if the CFPB chooses to close this loophole.

If THAT is the direction you want to go, it would be even less expensive to go to the website of the Secretary of State and form your LLC online. Some states do not allow online filing, but most do - and it's just a quick fill-in the blank form. Even so, I would consult a good real estate attorney to make sure you're making the necessary elections to be in compliance in your state. Even the webites that "form" your LLC won't do that for ya.

@Curt Smith , you'll need to send an email directly to Diane to get a response. Or perhaps leave her a comment over on her blog at ustaxaid.com. Eric just was sharing one of her excellent tax articles. That said, what she means by "front-loading depreciation" is the fact that the IRS now allows you to break down the property acquisition costs into more categories with shorter depreciable lives. This would create a higher depreciation expense in the early years than if all the costs were in just a few of the longer-life categories. It also means that those items will fully depreciate in those early years and the yearly depreciation expense will decrease over time.

@Derek W., it's "cover your a$$."

I second what @Dave Toelkes said - especially since the replacement is 1/3 of the total driveway. A patch job would be a current expense.

@Drew Dim , in your OP you specifically asked "do spec homes qualify for 1031?" Both @Jon Holdman and I answered that question. The you come back with "this isn't speculation." So I suggest that you follow the advice of @Steven Hamilton II and get with a tax pro, tell him or her exactly what you plan to do, and let him or her explain your options.

@Jon Holdman is spot on. Inventory, or stock in trade, is specifically excluded from Section 1031 treatment.