All Forum Posts by: Giedrius C.

Hi all,

I read through forums but haven't seen an answer to the question what is a reasonable salary for 1 owner S-Corp LLC that flips houses? Let's say everything is outsourced - houses are bought from wholesalers, GC does the rehab, realtor sells the house. The owner just finances the business and makes decisions. If there are 1-3 flips a year, the owner will spend only a few hours every month on overlooking the operations. Is it reasonable in the eyes of IRS for the owner to get paid per hour instead of fixed monthly salary? To me it wouldn't be reasonable to pay let's say $5k a month to someone who makes 5 phone calls a month, but IRS could think differently and likely there are precedents already.

Most responses in similar threads are "talk to an accountant" or "pay 60% of the profits and everything will be fine" which is not helpful, it's always safe to pay maximum tax and most accountants who have no experience in the matter will advise that. I'd like to hear from people who are in similar situations or even got audited by IRS and have personal experience in how a situation like this is treated. I appreciate any help. Thanks.

Hi, 

I'm a new resident of the USA and California and have a couple of questions regarding overseas portfolio and US taxes. I understand it's not an everyday situation I have but maybe someone is familiar with the issues. 

1. What would be the US tax implications if I let my mother in law use my overseas portfolio of properties for free (she can rent it out and collect rent for herself, use properties for her own needs or do what she want's with it)? There's the standard procedure to do that with no tax implications for me in that country, but I'm now US resident and I don't know if I need to report anything to the IRS on my tax return and couldn't find anything on google about it. And how would those properties be treated if I decided to sell them? 

2. How should I calculate depreciation of overseas rental property if I purchased it and started renting it out long before I became the US resident? Do I understand correctly that I should start depreciating the property from the day I entered the USA and not from the day I purchased it? 

Thank you very much for any help!