Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Tim Ivory

Tim Ivory has started 34 posts and replied 180 times.

Post: Market Analysis Websites

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

I want to read a report on a local market that is auto-generated that can show me how many houses have sold this year, which ones are most popular (beds, baths, age), and possibly best neighborhoods. I'm looking for trends. 

Shouldn't this information be easy to plot and show graphs? Which sites are doing this?

It also occurred to me, couldn't I do a 1031 exchange to avoid the capital gains tax? I'm still keeping option B on the table:

1. Get HML, buy house, rehab, pay the taxes, gain experience.

I'd want to use the profit as downpayment on a multiplex with atleast four doors, so having the cash in my bank account isn't necessary.

Thanks guys! I pretty much came to this conclusion after making the thread but now I'm much more confident this is the way to go - I'll suggest they keep the house and take out a home equity line of credit while I act as a the project manager so to speak for a cut.

It's good no one will pay capital gains tax, but what kind of tax can I anticipate for either of us in the state of TN (even a rough estimate would be helpful)?

1. How much is normal tax after the sale goes through, if any.

2. Having been gifted the money, when and how much do I pay taxes?

I realize these are pretty specific questions and I should probably pay someone for there valuable time, so I understand if you guys won't go to far into details and specifics. Bare with though, I hope to read a book or two all about these sort of things,  but for the time being, I think I should focus on making money, not saving non existent money, lol. Cheers!

Hi. My parents need to sell there home and I was planning on fix and flipping it for them since I've already been researching all about this investing option and know more about the logistics involved than they do. They owe 189K in equity with an ARV of around 280K. After putting together a Scope of Work, It seems it needs about 50K in repair work, leaving about 35K in profit after 5 percent in selling costs (using no realtors).

I'll be the project manager of the fix and flip, budgeting, planning, and hiring the contractors, as well as financing the rehab part of the loan. Originally, I had intended to simply have them transfer the deed to me subject to the existing financing or simply buy the house from them for what is owed on the house using a short term hard money loan, but the more i think about it, the more it might not be a good idea for any deed transfer. They owned the house for around 10 years, so am I correct in thinking they won't pay an capital gains tax if they sold it themselves? Whereas, if I take the deed before starting the fix and flip, I would be subject to this tax (and possibly self employment tax too) since I'd have the deed for a few months? If this is the case, wouldn't it be better to just partner with my parents so no deed transfers at all and we split the profit?

I like this idea, but I'm not sure a hard money lender would approve a loan application without me taking title? I'd be hard pressed enough to fine one willing to do a rehab only loan. 

How would you guys handle this situation? Should I be added to the deed, or would I still be subject to capital gains since I haven't owned it for 2 years? If the lenders requires my partner or I to have deed, should I have them cosign the loan (I really don't like this idea).

Post: Filing Taxes 2018 with LLC (Beginner Question)

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

 Point well taken and is one I feel I should ponder a bit more. Focus on my strengths I already have and build momentum and traction to get this train running. I really do like the idea of building capital without loans and less risk so I decided to develop my sales skills with cold calling prospects. I don't have to worry about loans, partnerships, finding other investors money, realtors, lenders, risking my credit, etc, while I build capital. It's a great idea but it takes time to learn. I want to give it a few more months to see what happens.

My plan is building capital with LO (without loans) until I earn enough to get conventional loans after 2 years of solid investing income and use the funds I've made with LO as downpayments for loans for rehabs. Build more capital, then when I have so much money I NEED to spend it somehow someway, I'll be going straight for buy and hold and BRRR's till the cows come home, until finally getting into new construction and commercial opportunities. This income isn't an ends but also a means to even something larger outside of the real estate sector. So plans within plans, dreams within dreams.

Post: Filing Taxes 2018 with LLC (Beginner Question)

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

@Joe Splitrock

Believe me, Joe, I did not mean to step on any toes either. I have a lot of respect for those with a knack for accounting (and law for that matter). I'm not one of them. Nothing comes easy, especially nothing worthwhile! My point was, with fix and flipping, results, either positive are negative come aptly, unlike prospecting which yields results much later after the skill is acquired. I was quite literally a hair away from my first LO deal but I hesitated taking the offer because the seller wanted to essentially split the LO fee. In hindsight, doing it for free to gain the experience would have been well worth it even. Live and learn :) 

On that note, if I even made even a penny in real estate I'd not only hire a CPA, but actively look for an awesome one who knows real estate. I love talking to people in general about these things and enjoy the conversations a great deal. I'm just not at that point where I feel my efforts, time and money, are well spent seeking these relationships when I haven't made any income yet! Forgive my lack of enthusiasm, but I think Linda said it quite well, I've dipped my feet in and want to get out as soon as possible and get it over with so I can focus on more important things, imo. I've been as careful and accurate as possible so let the chips fall where they may, moving forward or learning from any mistakes.

Post: Filing Taxes 2018 with LLC (Beginner Question)

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

Solved the issue with dependency and filed :) All is good on this front.

Only the FAE remains :)

Thanks again to everyone for there very helpful advice (and rants). It's much appreciated!

Post: Filing Taxes 2018 with LLC (Beginner Question)

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

Okay, seems filing a FAE180 has more steps involved that I thought. It must be filed electronically on TNTAP.

I needed to first register for the franchise and excise tax, which can take 1-2 days. Once I have created and have access to this account, I can file online and pay the minimum $100 FAE tax.

So, have two things to do tomorrow: call the IRS and TNTAP to make sure I'm doing things correctly.

Post: Filing Taxes 2018 with LLC (Beginner Question)

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

@Eamonn McElroy Thanks for your specific guidance. You are right. I need to pay a minimum of $100 franchise and excise tax via FAE 170, regardless of inactivity. Thank you!! 

I'm confused on FAE 183 though, what is this?  FAE 183 - Application for Exemption/Annual Exemption Renewal. Do I fill this out to avoid the minimum franchise tax?

Seems clear that I won't need to file a SCH-C at the fed level:

When an LLC only has one member, the Internal Revenue Service (IRS) will automatically ignore it regarding federal tax liability. This is because the LLC member's expenses and income will appear on their individual tax return. When an LLC has two or more members, the IRS will automatically treat it as a partnership. Therefore, the LLC will file an informational return to report their income, gains, losses, deductions, credits, etc.

Filing for Disregarded Entities

When they're not treated a separate entity, LLCs are taxed similar to sole proprietorships. In other words, their expenses and income are filed on Schedule C of their members' personal tax returns. Schedule Cs must be filed for all LLCs that generate income of more than $400 annually.

A single-member LLC, without any expenses to deduct and no business activity, is not required to file the LLC's income on Schedule C. Remember, the member will need to file an individual tax return, and may need to complete a Schedule C for self-employment income.

Post: Filing Taxes 2018 with LLC (Beginner Question)

Tim IvoryPosted
  • Morristown, TN
  • Posts 200
  • Votes 21

@Basit Siddiqi I see. Thank you!

Would it be easier to have the CPA that reviews it also submit it?