All Forum Posts by: Daniel Mills

Hi @Bruce Crawford . Actually, he gave me lots of useful info. Could we set up a call sometime, it would be nice to talk it through with someone in the same situation?

Thanks @Lance Lvovsky. I will see how quickly they respond this time and consider switching.

Hi guys,

I have a question regarding Living Trusts. I am a US expat living in Japan, which means I have the difficult task of navigating both US and Japanese taxes and laws. I created a living trust last year with an attorney in the US, but haven't funded it yet because I needed expert advice from a Japanese CPA before doing it. What the Japanese CPA said was that I can fund it without incurring a gift tax (on the Japanese side) as long as the title of the trust does not contain my name and my wife's. Right now it's called something like, "Daniel Mills and Megumi Kohyama Living Trust." Is it possible to change the title to "Mills' Living Trust" in order to avoid this little Japanese tax issue or is there some reason that both people's names need to be on it? 

I know someone will say, "check with your attorney," which I plan to do, but since it was created through a large corporate law firm I don't always get the quick response I would like. I just wanted to see if anyone had some knowledge on this first.

Hi guys,

My name is Daniel Mills. I live and work in the Kansai area of Japan. I am an experienced real estate investor (I own about 50 units in the US) and would like to host the first Kansai Meetup. I just want to put a first feeler post out here for anyone located in Japan to see what sort of interest I can get. A couple of things I'm pondering:

1. Kyoto or Osaka?

2. Is there anything I need to do to register the meetup or is it just a matter of posting here and on meetups.com?

3. When is the best time? What day of the week do most people do the meetings?

@Cory Ballantyne, @David Gotsill

Thanks @Ethan Cooke. That’s perfect.

Daniel

Has anyone ever done a short-term rental, or maybe even a long-term one, with a property you rent rather than own? I listened to an interesting vlog regarding house hacking a property you rent by sub-leasing and it got me thinking about how this might work with a short-term rental.

Anyone doing this?

Hi guys,

I have a couple of resources to share that might be helpful:

Thun Financial specializes in cross-border financial and estate planning. They have several guides and webinars about it - https://thunfinancial.com/

Also, I was under the impression that if I passed, my wife would not be able to assume the mortgages on my SFHs. However, I came across this information regarding passing properties with mortgages between spouses - https://info.legalzoom.com/happens-inherit-propert...

It seems that there is a legal provision so that spouses can assume mortgages. I wonder if it applies to non-US citizens. This might reduce the amount of life insurance coverage I would need.

Finally, one thing I have been thinking about is setting up a US-based bank account, so my wife can easily collect payments and pay mortgages, and a brokerage account. In order to claim all of our deductions on our US taxes, my wife has an ITN and files jointly with me. One unattended consequence of this is that she may not be able to invest in Japanese securities through programs like NISA and i-Deco without incurring tax issues in the US. I wonder if it would be best for her just to invest through Vanguard.

https://thunfinancial.com/home/american-expat-fina...

Any thoughts on this?

Hi @Bruce Crawford I am definitely in the same boat as you and have fretted over this for a couple of years now.

My personal portfolio consists of 9 SFHs in the US and I'm also part owner of an investment company which has about 40 units in Alabama. My wife is also Japanese and we live and work in the Kansai area. And, I use the depreciation on my SFHs to reduce my Japanese taxes.

I talked to a US attorney concerning my situation and his advice was to create an irrevocable living trust, then place all of my SFHs in land trusts and then in LLCs which are held by the living trust. But, he had no knowledge of how this might affect my Japanese taxes. I consulted a few Japanese CPAs, who didn't really know, but they said it's possible that by transferring the property ownership to any of these entities, including the living trust, could be seen as a sale in Japan and you would have to pay the capital gains, which can be substantial because of the recapture.

In addition, placing the properties in an LLC could make it impossible to claim the deductions on your Japanese taxes because it's not held in your personal name. However, one Japanese CPA said that Japan does recognize LLCs as pass-through entities from certain states, but it's (sucks teeth) muzukashii. 

Like @David Gotsill points out, I think, in the end, you just have to decide the chance you are willing to take and do it. I have decided to create the living trust with my wife and to transfer all of my assets there. If I ever get questioned about it, I will say it is simply a part of my estate plan and is just to make asset transfer easier when I die. I am reporting everything and paying taxes as required by both countries, then cross my fingers and hope for the best. I think it would be really unlikely to get "caught" anyway, but that's what I would do if it happens.

For me, I just want to make sure that if I die, it is as smooth as possible for my wife. To that end, one of the things I am working on right now is a step-by-step guide for her if it happens. I would be happy to share it with you guys when I get it done. I am also getting an international life insurance policy that will allow her to pay off all mortgages on the US properties because as a non-US citizen, she won't be able to assume the mortgages. 

Sorry for the long post, but I would love to keep this going because it's such a difficult topic for those of us living in Japan, and has caused me a lot of stress over the years.

Daniel

@Alex D. , sure. I'll send you a message.

Daniel

Sure @Lane Kawaoka I'll DM you.

Daniel