All Forum Posts by: Eric Williams

 What kind of account is it being held in currently?

 You really can't without more information, especially as concerns the periods depreciation amounts are taken and the marginal rates they're taken at. If you really wanted to calculate the benefit you would use a discount rate as well.

Plus there is the terminal value amounts which will contain recapture amount breakout.

Then you have to account for possible other passive activities, active participation, AGI, etc.

Plus the marginal rate may be a blended rate with adjustments as some states required bonus adjustments.

Plus if you are an LP you are passive by default so you need to go through some layers of basis before it gets to your 1040.

I mean any number provided has a long way to go.

This is an example of how intense some depreciation optimization calculations can be. It wouldn't require that level for your question but the point is there's a lot more than gross depreciation X investment %.

 How to Report the Fair Market Value of Non-Traditional Assets In Your Self-Directed Retirement Account | Self-Directed IRA by CamaPlan

 Don't listen to him.

You don't have analysis paralysis you just haven't developed the awareness to spot ******** structures provided by people who will forget you tomorrow.

1) Texas - you have an LLC in Texas you have a Texas Franchise Tax Due every year (likely a No Tax Due). Increase in compliance costs, because you need an SoS ID and Comptroller ID.

An LLC can be taxable in Tx for Franchise purposes.

2) Sub to parent liability - the holding company can still be he liable for actions of the subsidiaries

The same result was reached on similar facts in Davis v. Alexander" where the parent railroad company actually controlled another railroad and  operated both as a single system. Where there is direct control and complete unification into a single merged activity there is little doubt as to liability.

3) To avoid that I need to maintain separate identities such as with accounting records, bank accounts, arm's length transactions, etc. More work.

4) Here's more filing requirements for WY

5) You may only have one LLC to file in CA and may have an exemption the first year. Those other LLC's are already registered to other SOSs, and there is no way they have enough income to create apportionment and allocation requirements. Basically CA is still on the PPP nexus which a lot of states abandoned. I only think you have a single CA filing and you don't have one the first year.

Basically three different state filing requirements, possibly additional efforts to maintain three separate identities, etc.

Get rid of that WY holding company. It connects the two separate properties and provides me a pathway from one to the other by collapsing all three if I have grounds.

I mean if we want to get stupid with it turn the WY into a management company and charge the LLC's.

The income is non-taxable to WY but the LLC's get a deduction on state and Federal.

Just make sure its' arm's length/documented (see Cayland Land and Cattle).

Personally I would just do the two in CA and LLC and make sure you don't do anything on their behalf that would allow jurisdiction by Texas.

I dunno but I would seek out less expensive in time and money. But what do I know I'm wrong more than I can remember.

 Where were the subsidiaries' articles of organization filed?

If one of them was organized in TX you may have a Texas Franchise Tax due (is that right Michael?).

 What would be wrong with creating a partnership and structuring transfer to you at death somehow?

You can use a CPA for entity formation.

I've filed LLCs and 2553's and 8832's.

I mean honestly I have attorneys send me partnership agreements for S Corp bylaws, which mention 704 which technically invalidate the S election.

I've seen them fail to make proper debt structures for S Corporations for basis purposes.

Have them work together. Let them catch each others' errors.

But why the S Corporation?

 I think I may understand but correct me if not.

The policy in your name would not prevent attachment.

I think it does defeat the purpose. If the policy does not name the trust as beneficiary, could that mean amounts paid to you could then be sought for settlement purposes? 

Also the assets are titled to the trust; how is the insurance policy in your name going to cover things that don't belong to you?

Not an insurance expert but I'd do more research. I do know the basics of a trust though:

grantor

property

beneficiary

trustee

The trust has legal title to property, managed for the economic benefit of the beneficiary.

So are you really insuring something that doesn't belong to you (assuming trust title).

I dunno but I would personally proceed with caution - those insurers aren't going down with you.

 For what it's worth (and I'm not disagreeing), strategies ahead of time require you informing your CPA of potential transactions.

I can't do as much when the transaction is completed and I'm finding out about it the year after.

You will pay the price for your ignorance alone. Ask questions.

 I like the first option. You should get a step-up in basis via valuation at the date of death.

That would then be passed to your son which would allow for more depreciation, less gain, etc.

Using some of the profit to help with a down payment may create gift tax consequences.

Maybe keep the property, avoid capital gains, get a step-up, and still provide for transfer to the son.

Someone can point out if I'm missing something.