All Forum Posts by: J.C. Martel

Currently I have a single member LLC for LTRs and an S-corp for my flips and RE commissions. Im getting into a private lending deal… should I create a separate LLC or can I use one that I have?

Question for the group - If you flip in an S-corp, can't you take the first $40k (single) or $80k (married) as tax-free dividends? 

I use the RESPtracker app. You can break it out by general RE activities and material participation. It also has a dashboard where you can see how far along you are with meeting the 750 hours requirement with at least 500 hours in material participation and 250 hours in general participation. I like the app, but wish I could upload a CSV rather than manually enter time for each day.

I'd probably do something scrappy like take a large personal loan or hard money loan to supplement your $25k, then buy a distressed property and flip it so that then you have a lot more cash to work with. I see that you are a contractor, so you presumably have the skill to put in the labor and just need materials. 

Thanks for adding clarity, Wayne. 

Question for you all - I am planning to use flip proceeds to pay off my vehicle under Sec 179. My flip is done in a s-corp and rentals are held in an LLC. How should I deal with using flip proceeds in the s-corp for the vehicle, yet using that same vehicle for managing the rentals in the LLC? From a tax accounting and documentation standpoint, does anyone have advice?

Does anyone know any lenders that require only 10% down on a DSCR loan?

Joe and Wayne, my understanding is that in an s-corp we avoid the 15.3% tax when flipping. I plan to use Sec 179 for the vehicle write-off, keeping records on mileage for business and personal. Also my understanding is that if you do another flip before the end of the year and your money is invested at years end, then you don’t claim capital gains for this year because the money has been reinvested.  Also keep good documentation on the basis, including initial investment, closing costs, etc. I just printed a list of basis items to make sure I don’t miss any, and I’m keeping records on each item in case of an audit. Any other helpful tips are appreciated!

Great question, curious if you found an answer. I’m in the same boat. 

Ryan,

Interesting stats. Surprised to see white mountains median housing price so low. I’m interested in buying in that area. 

Great advice, Micheal and John. Thank you for the reply. It sounds like tax strategy meetings aren’t really a product offering outside of full service partnership, where strategy consultations are combined with tax preparation services. True?