All Forum Posts by: Daniel McNulty

@Brandon Fuhrman

You are better off using the BP forums and calculators to get started. Listen to the podcasts, read the BP books, find a good realtor and learn your market.

@Beaux Blackwood

Most likely not. You’ll likely be paying taxes on the stock gains.

@Christian Beyer

Most golf courses are are train wreck financially. Breaking even is par for the course.... see what I did there.

Unless you aspire to be a land developer, I wouldn’t touch it in hopes of generating cash flow.

@Tom Dittrich

Sounds like a good idea but you may have trouble executing it at that scale or at least for the first go of it. Your legal fees in getting properly setup will likely double or triple what you might bring in.

@Jason Collins

If you reasonably believe your estate will be less than the 11.5 M or 23 M if married, you have the freedom to gift cash without worry. 15k / 30k if married can be gifted to any person every year without any estate implication. So excess cash flow can be used this way.

Other assets that have a basis, pretty much everything else, should be passed after your death. Otherwise the receiver of said gift will also receive the original basis, which does have tax implications.

A trust offers more in terms of control or specific wishes for the next generation but isn’t always necessary.

@Rick Curtis

It sounds like your underlying constraint is income in retirement.

For that reason alone, keep the rental.

If you do plan to sell the primary eventually, I would divert the extra payments towards generating more income. Lots of ways to get there, but buying land would probably only make sense as you approach retirement.

@Femi Ibrahim

The Midwest is certainly a great market for cash flow.

Unless your mortgage rate on your primary is particularly bad, there is no reason you have to pay it off first. Your DTI should be good enough you can get started while still paying down your primary.

Also helocs are great if you need the cash to finance down payments, but you clearly can do it with monthly income.

To put it simply, you may be over complicating things.

@Thomas Rutkowski

Good call. I believe you are correct that publicly traded securities cannot be sold in installments.

That being said, you could still intentionally dispose of the appreciated securities over time to spread the gain out over multiple tax years. However it certainly throws a wrench into the plan of using it all to purchase real estate.

@Stephen Lyons

There are a couple of options. Utilizing Opportunity Zones will allow your to defer the gains and eliminate part. The downside is that it is complicated to qualify and may be more head ache than it’s worth trying to own direct real estate such as a single family home. Most people opt for a syndication or real estate fund that has navigated the legal and tax complexities of an Opportunity Zone. You would just invest passively.

Another option is to use something like a deferred sales trust, which is essentially just a creative way to do an installment sale.

Neither option is cheap or easy to accomplish alone.

Depending on how large the tax bill might be, it may be easier to just pay a little tax to have the flexibility to do what you want. Especially if these fall into LT capital gain rates.

@Alan Duro

So the real question is can you contribute a personal capital loss to a partnership, c Corp, trust, etc...

Unfortunately the answer is no.

However, among closely held entities, I have seen partnerships stuff gains into non taxable partners or entities with loss carry forwards such as your friend has.

Technically speaking it may be possible to find an opportunity that will let your friend do the same, presumably in exchange for something like lower fees.

Practically speaking it may be a lost cause and could result in more trouble than its worth.

Don’t let the tail wag the dog...