All Forum Posts by: Dan R.

Does anyone know of strategies for minimizing income taxes on intra-family land sales? I'm purchasing a portion of a family farm from my sister. We co-own the remainder interests on our father's life estate. He is still alive and well, and will convey his interest as needed. Would a gift status or any similar transactions be of benefit?

Thank you for the feedback!

Thank you Steven.

Thank you Marie. 1040 Line 29 seems like the right location. I don't have Sch C income, only Sch E. Do you know if your Sch C income is what allows the Line 29 deduction, or if Sch E would allow the same?

Thank you again.

My accountant has taken the position that health insurance premiums for full-time, self-employed real estate investors are not deductible on Schedule E since real estate is not technically considered a business by the IRS. This seems contrary to what I have heard other investors discuss. Does anyone have any insight on this?

Bill, thank you so much for the advice. By the way, I'm a big fan and greatly value the insight that you share with the BP community. Thank you.

A local attorney does my closings, and it sounds like it's time to get him involved with this contract. I believe the contract language you suggested will please the seller. He has shared his lifelong experiences of tax and workers comp evasion with me, so I won't be too surprised when that audit occurs. I would much rather buy from honorable and reasonable people, but like you say, he controls his own hanging rope.

Thank you everyone for the feedback. Steven, do I understand correctly that my CPA will not issue the seller a 1098 or other reporting form annually for my payments? As I think through this more, I believe I'm going to insist on payment by business check but assure him that it is his responsibility, not mine, to report the interest income to the IRS.

This is a question for my accountant, but since he's on vacation this week I wanted to see if anyone has had a similar experience. Here's my dilemma: I have struck a deal for a seller-financed acquisition of a mobile home park. The owner wants a guarantee that my payments to him (and his interest income) will not be reported to the IRS. In fact, he wants the monthly payment in cash. Does anyone know the borrower-buyer's IRS reporting requirements in this type of deal? The seller is retired and is not in the lending business. As currently structured, the annual interest would exceed $600. Under another deal structure he is agreeable to a 0% interest rate, but I'm not sure if that would be viewed as reasonable under an audit. My goal is to meet his wishes, do the deal, and stay in full compliance with IRS regs.

Thank you.

Dan

Thank you for the feedback.

I have a vacant building lot for sale and through my marketing efforts have been able to connect a build-to-suit homebuyer with a local custom builder (who also happens to be my uncle). The title to the land is held within my LLC. The homebuyer is using a construction loan for the new home. My questions are: What are the typical transaction steps to convey title in this scenario? Would conventional construction lending allow the buyer to purchase my home prior to construction commencement, or will the builder need title beforehand?

Thank you for any advice and insight.

John,

Your plan is a very good plan. I own homes that way, and in a small park. I also own older stick-frame rentals. MHs are far, far better investments in my market. Most critics of MHs don't own any. They don't understand how easy repairs are, how window AC units usually bring in the same income as expensive split systems, how easy they are to rent, and how low property taxes and insurance both are compared to stick-frame. Most of my MHs were built 1978-1986, so they also don't understand how resilient they are. I'd say buy as many as you can and don't tell the guys down at your local REIA about how your returns compare to their returns.