All Forum Posts by: Bill Walston

Bill Gulley, I agree with you 100%... I have seen notes between family members make excellent asset protection strategies. I have, in fact, used them myself on occasion. :) But not in the manner set forth by the OP. I guess the problem I had was the statement "As a result I will still own the properties, enjoy tax benefits, to the outside world it will look like I am indebted pretty heavily. Either you are (or are not) indebted heavily. IF his program is set up as you describe I'd have no problem. Frankly, based on my reading of the situation, I don't think it is. And that's why I suggested it be looked at by a good attorney to make sure it would fly.

I don't disagree with that Bill Gulley..But it does kinda fly in the face of the comment "i would assume any judge would understand that it takes certain $$$ to bring up and educate the kid"...

But maybe that's just me..

Cash deposits would be even better for your creditor - you couldn't prove that the payments came from you...

The point is that your creditor will argue that your "mutual contract to repay" is a sham because you are not under an obligation to repay your parents for something that they are required to provide for you. Accordingly, his (the creditor) claim should supersede the sham claim of your parents.

You asked for an opinion. Mine is that you need to run your plan by a good attorney because I don't think it will stand up in court. There are MUCH better asset protection strategies available to you. But as you said, they will cost you some money.

Perhaps you will never be sued and your "asset protection plan" will never undergo legal scrutiny - and this will all be a moot point...

Good luck..

And if I were a creditor attorney I would say that you "doth protest too much."

My first order of business would be to subpoena your and your parents bank records to see that the money is both received and spent by your parents. Never forget the old adage "follow the money."

I agree, any judge would assume that. And I would say that most state laws reflect that support for a child (including his/her education) is a parental responsibility and not a compensable act. The judge would RULE based on that. You may want to check out some of the case law where a parent has attempted to sue children for reimbursement of what are determined to be NECESSARY expenses (such as education or medical).

I would strongly urge you to discuss your "plan" with a competent attorney to see if it would fly in Illinois. I would bet that it will not. But then I COULD be wrong :)

And don't forget, as investment income interest will be included with other net investment income when determining if the new 3.8% surtax is applied. Even though the law was signed in 2010 it wasn't effective until January of this year - I think lots of folks are in for a surprise when filing 2013 taxes... Just sayin'

Short answer? You can't. At least not under the current rules and regs.

Your CPA is correct. You WILL get your deductibles when you sell.

There isn't a strategy that will allow you to take deductions for real estate losses if income is in excess of $150K. What does your CPA say? She's more "in the know" about your current tax situation than are we.

Brandon Turner, I'm sure Steven Hamilton II will swear he NEVER thought he'd hear this from me ... but let me just say... you don't need a CPA... you need a "real estate knowledgeable tax pro"

That person may or may not be a CPA..Just don't limit your search to that designation :) There are some excellent tax guys and gals who choose not to be a CPA.

Now, if you need audit work or some such done, that's a different story ;)

Tom V., I don't think you have anything to worry about. My reading of the CT LLC Articles of Organization indicate that only ONE member has to be listed. The instructions, in fact, state that a LLC may have as many members as it wishes, but only 3 will be listed in the data base. The number of members on the initial filing has nothing to do with the tax structure of your LLC. [Note: I'm not a CT attorney, and this is not legal advice :) You should verify this with your tax pro and/or attorney.]

Thomas DeMoss, it sounds like your LLC is being taxed as a partnership and not a corporation. If so, and you become the only member, the tax status will default to that of sole-proprietorship. You WILL need a new EIN if you choose not to use your social security number. You should not use the existing EIN number.

If your LLC is being taxed as a corporation there will not be a change in tax status and a separate return for the LLC will still be required.

Hope this helps.

William Hall I'm afraid you're out of luck. Bill Gulley is correct when he says "bad debts must have been earned." This means that in order for you to deduct a bad debt, you must have previously included the amount in your income or loaned out your cash. That didn't happen here. You have no basis for a write off.