All Forum Posts by: Isabel Peraza

Ashish Acharya, Thank you for the very clear and precise answer! 

I am planning on selling a large farm to the occupying tenant. He is trying to obtain financing, however, he poses a huge liability risk for me. I have no idea how long or if he will be able to obtain financing and I am contemplating transferring property to an LLC just incase. My main concern is that I will be making about $350,000 profit on sale and not sure how the transferring to an LLC will affect me tax wise. All the rehab expenses etc were made under my name personally over 8 years ago when I first bought it. Also, I would shut down LLC after sale. How would I distribute profits or will it be considered pass through income at new lower rate? I hate to go through all this effort but this tenant keeps me up at night.

@Mary Ann Casey

Hello Mary Ann,

I had almost the exact situation at a property in Florida. I knew that I would not be able to enforce any judgement and probably just spend a lot of time and money trying to take tenant to court. I did file a claim with my insurance company who did consider the degree of damage as vandalism and it was a covered peril under my insurance. I was paid for the damages. Hope this helps. 

@Phillip Bennett: Hi, I am new to the board, however, I currently have a tenant whose immigration status may not be legal. They always pay on time and are probably the least likely of all my tenants to want to deal with the courts for any type of eviction. Just my personal experience. 

As far as a 1031 exchange. I do not know a whole lot about these. But my understanding is that they are not very closely regulated and I really would not trust anyone enough to park my money with them. Another factor is that I do not think I will be buying very much anytime soon. We are in a ridiculous bubble again here in Miami right now. 

Thank you for the reply. My income is at over $600,000. All my properties have been held for over 3 years. And all properties are located in Florida. I was thinking the sales would be under capital gains and the profits from rents would hopefully be considered pass through at the new 21%?( about $350,000)

I can live with 25%. Rather not pay 37% which is my new rate. 

I am currently making about $350,000 of rental income profit per year. I am a full time, licensed realtor. Will be selling two properties that may generate about $700,000 of profit. Being that I am a full time, licensed realtor, will the profits be taxed at the new 21% as pass through income?