All Forum Posts by: George Skidis

Illinois REIA was established in 2015. We hosted meetings at The Home Depot in Belleville, Il prior to covid. We have started meeting in person at Polly's restaurant Located at 15 South Stanley in Cottage Hills IL. We normally meet on the third Monday of the month but that will not be the case in April as that is the Tax filing deadline of April 15th..

I prepare 170+ tax returns a year for my clients. The correct answer is maybe. Maybe you should, maybe you shouldn't. 

So yes. You can file amended Federal and State returns to claim the missing deduction. The question you need to ask yourself is "IF" the cost of filing an amended return is worth it. Call your tax preparer and ask them what they charge to amend a return. If they charge $500 and your deduction is only $250 it is probably not worth it. Also, if you were already showing a loss on the property and were refunded every penny you paid in from all sources, it might not be worth it. Exception: if the deduction is large enough to create a Net Operating Loss and be carried forward to a future year when you have a larger profit. The amount of the HOA charge and your deduction make all the difference. So the correct answer remains maybe.

You can only go back and amend returns for 3 years from the most recently filed return. Once you file your 2023 tax return you can no longer amend 2019. However, you can amend 2019 before filing 2023. 

So now that the waters have been sufficiently muddied, the choice is yours.

You use the terms Operating Agreement and Partner in your post. A partnership has a partnership agreement. An LLC should have an operating agreement. Which is it? What tax form does your business file?

Your partner would owe capital gains on any profit they make on the sale. If the buyout shows a profit equal to zero then no capital gains. You would have owe capital gains tax on your profit when you sell it.

Capital gains tax changes with the wind and if democrats or republicans are in power. If you have owned the property less than 12 months then the sale is subject to short term capital gains. If owned over 12 months, then then the sale is subject to long term capital gains.   So if at the time of sale capital gains was 10% then short-term capital gains would be 20% on the profit.

The formula for profit us: Sales price - (basis and improvements) + recoverable depreciation = profit.

Illinois REIA holds a monthly meeting in Cottage Hills, IL right next to Alton. We meet at 6 PM on the third Monday of each month at Polly's Restaurant 15 S Stanley Road.

Your wlecome

As a former insurance adjuster here are the facts as I remember them. The mortgage company and the tax and demo form have greater rights to those funds than you do. The city will not release the funds until AFTER the property is repaired OR it is demolished. This law was passed by the STATE of Illinois to prevent the unscrupulous from walking away, pocketing the funds and leaving the city with a mess.

So you sold the house. good for you. However, it was neither repaired nor demolished as the law requires. Until that happens you can kiss that money goodbye. The city is protecting the potential clean up expense and that is backed by state law. The city has no guarantee the buyer will do either of those things hence they sit on the funds.

Your sale of the property means nothing to the city. However, if the buyer either repairs or demos the house then you should get access to the funds. Don't remember if there is a time limit or not.

You should contact Shari Petterson. Her company does transactional funding. 314-750-5880

50/50 partners is a partnership. 

For the most part a single member LLC is a pass through. Without specific "Spouses" language in the LLC Operating Agreement a multimember LLC is not a pass-through entity. So, unless you hired a great attorney your LLC is probably a Partnership and is required to file form 1065 and issue K-1s to the partners. Partnership returns are due on the 15th of March.

On a 1040 Personal Income tax return Schedule C is for a sole proprietorship. It is assigned to one spouse and it stays that way. Schedule E is vague on the matter.

You need a good attorney and a great tax preparer. Don't have one PM me.

Good Luck and Good Investing!

George

Disclaimer: I am not an attorney, nor do I play one on television. I am an insurance agent, income tax preparer, landlord and President of the Illinois REIA.

First, the new Federal Business Entity Transparency laws that took effect in January 2024 blow most of your hide in plain sight planning out the window. Review FinCEN.gov to see how it impacts your choice of entity.

Register the business where you want. Just remember you must also register it in the state where you are doing business. Even though you have a Wyoming LLC, Florida state law prevails in a legal dispute in that state. That will also ruin most of your strategic planning and privacy wishes.

Let's say you went to a Busted Pockets seminar and spent $6.000 for one of their "SPECIAL" LLC packages in Wyoming, but you plan to do business in Florida. You will need to file two state tax returns, pay for two registered agents, file and pay one annual Domestic (resident) LLC registration in Wyoming and pay a second Foreign (out of state) LLC Registration in Florida thee state where you do business. There are also several other duplications. So, can you afford an extra $1,000 to $2,000 a year to support some out-of-town guru's pipe dream?

Asset protection is like building a castle. You need a moat, drawbridge, high walls, parapets, soldiers, an inner keep and more. But even that can fail. Just look at the number of times Jerusalem fell to foreign invaders.

As you can imagine, almost no one owns a castle anymore. However, we can build one out of combining the following: Getting a good attorney that practices this area of law, own property in land trusts, obtain property and casualty (liability) insurance, pay for umbrella liability insurance, personal property trusts, proper maintenance, documenting all property maintenance requests and completions, screen all future residents over the age of 18, screen all contractors, collect W-4s from all hires and file 1099s, change the locks between residents and the list goes on. Solid business practices will build that fortress you are looking for. 

Before you start complaining about the expense of insurance just remember you were considering paying an extra $1,000 to $2,000 a year to have a business in two states.

Good asset planning starts with your attorney and insurance agent. Don't have either one PM me for a referral. Just remember your cousin/brother-in-law the attorney, who practices divorce law or speeding tickets, is not the attorney you want for asset and estate planning.

If you did buy an LLC at a seminar and they set up your tax ID, look at the form that you received from the IRS. That response to an SS-4 tells you when the first tax return is due, EVEN if you didn't make any money.

Good Luck and Good Investing!

George

If Landlord properly serves a 30-day notice, there is nothing you can do.