All Forum Posts by: Duc Ong

On Harpta, I found the following: 

1. The amount that was withheld on the sale is excessive. How can I pursue a refund earlier if I have no other Hawaii income items to report? In the event the withholding under HARPTA is excessive, the Transferor/seller may apply for a tentative refund using Form N-288C "Application for Tentative Refund of Withholding of Tax on Dispositions by Nonresident Persons of Hawaii Real Property Interests". Even though the State approves and pays a tentative refund request, the Transferor/seller must still file a Hawaii income tax return for the year of transfer. Even if a tentative refund has been approved and paid, if the return as filed shows a tax due, the Transferor/seller must pay the tax.

2. If the Transferor/seller will not realize a gain on the transfer of the Hawaii property, the Transferor/seller may apply to the Department, using Form N-288B, for a withholding certificate that reduces or eliminates the amount to be withheld by the Transferee/buyer. The Transferor/seller should submit supporting documentation to show that there will be no realized gain. Such documentation may include:

 Closing statement when the property was purchased showing the purchase price;

 Documentation showing the depreciation allowed or allowable, if any;

 Documentation for any capital improvements and other increases in basis;

and  Documentation showing decreases to basis, including any deferred gain from any prior sale(s). Form N-288B must be filed with the Department at least ten (10) working days prior to the date of transfer or it will not be approved. Although a withholding certificate may be granted by the Department based upon no realized gain on the transfer, the Transferor/seller is not relieved of the duty of filing a Hawaii income tax return for the year of disposition.

@Abimael Rivera-Lopez I would sell the HI place and buy locally, wherever you are moving to. With the equity and the VA, you should be able to get into a decent house-hack arrangement, or just use the VA for your primary and the equity for your investments.

@Jared H. Something else to consider is the return on equity.  When you pay down a mortgage, you are effectively getting a return equal to the interest rate.  I'm sure you can do much better than that in many other markets or even on Oahu in different strategies like short-term rentals.  

@Jonita Pereda-Ovalles Aloha and welcome! The VA loan is the best deal out there for those that qualify, especially since you can get started with so little down. Let me know if you would like to meet up for a coffee and chat about RE investing.

@Jared H. I would invest in more real estate instead of paying down the current home.  Ideally, your next investment would be positive cash-flow.  When you do move in 2 years, you could sell and capture the appreciation tax free.  Let me know if I can help!

@Andrew Cannon Welcome to BP!  Hope to meet you at one of the meetups soon.

@Simone Koga Thanks for the quick response.  Sounds like a decent deal.  Best of luck!

@Simone Koga Congrats on the STR! Just curious, who did you go with for financing and how much of a down payment did they require? Maui VR is on my list of acquisitions in the near future as well.

I'm planning on attending.  See you all there!

@James Chun II Another option is to get a HELOC. Many of the local banks and credit unions offer intro rates. This would allow you to tap that equity without doing an appraisal, as long as it's under $250K. I recently did this with my primary residence and put the whole balance on the HELOC. Now I have more liquidity and can pay down the principal balance much faster than with the traditional amortized loan. Let me know if you have any questions!