All Forum Posts by: Ken McGrew

There has been a great deal of discussion of the motive of some attorneys to steer people towards LLC when this might not be the best option. The purpose of the forums, I think, is to share and discuss experience so we are not at the mercy of the first attorney or CPA we contact.

I have been researching revocable trusts and came upon this interesting presentation that advocates use of a living trust in conjunction with an llc as the beneficiary:

http://andersonadvisors.com/wp-content/uploads/201...

Has anyone used such an approach and if so can they make suggestions of best practices and/or recommend an attorney who understands both estate protection and real estate investing in the Houston area?

In my situation I am unable to follow usual strategies for the following reasons. I have a couple of rentals and am expanding. I am able to get very favorable financing in my personal name but can't transfer to an LLC by lender rules. I can however transfer to a revocable trust. I will be managing the properties personally and will be doing some work myself that does not require license. Otherwise I will use bonded and insured contractors. I am most interssted in protecting personal assets and if possible isolating any judgement against one property from the others as well. I will ofcourse want to have appropriate insurance and umbrella. So many questions come to mind such as whether each property should be in its own trust and whether the beneficiary of each property should be its own series in an LLC.

Thanks,

Ken

Hi All,

Thanks for your input.  It has been my experience that finding a CPA who understands the real estate professional status requirements is next to impossible in my area.  Fortunately most questions have been answered on this forum and from other sources.  It doesn't seem that anyone has generated a list of activities that are being allowed.  Brandon's post covered most things. My only remaining questions are about whether educational activities count and if/what supervision of professionals we hire count.

I am aware of the general requirements in terms of the 750 hours, 51%, 500 hours or 100 hours, Etc.  Meeting the requirements and this status is a good fit for our needs in general. But I don't want to track time that won't count and do want to track all time that will count.

Thanks,

Ken

Hii Brandon,

Thanks for the quick response. It clarified things well regarding acquisition. 

Do you know how the IRS is viewing educational activities, both formal and informal?

Thanks,

Ken

Hi all,

I am resurrecting this discussion in hopes that folks with experience can illuminate exactly which activities the IRS will and will not count towards the 750 hours.  For example, the law says that time spent on acquisitions should count, but reportedly the time spent looking for properties is not counted as acquisitions.  How does one learn, ahead of an audit, what the IRS will accept?

Thanks,

Ken