All Forum Posts by: Lance Lvovsky

Won't be able to make this meeting... it is that time of year where I am swamped between client meetings and getting Tax Returns filed. Hope everyone enjoys the meeting! Looking forward to joining again at a future date.

@Jeff B. No worries! Just want to make sure everyone understands the rules when it comes to expensing/depreciating assets for real estate. I have seen quite a few advisors provide inaccurate information regarding Section 179 expensing. It is one of those exceptions to the general rule in Tax Law, and can be easily missed.

Originally posted by @Eric Gabriel:

@Lance Lvovsky You are saying the property should be in the name of the trust.  For example: 4-plex owned by "Big Guy Trust" with a name that doesn't identify me.

Create an LLC that has me as the managing member (my job) but owned by the "Big Guy Trust".

Does that sound right?  Or am I mistaken?

Eric - I cannot be providing you advice or telling you what to do given the nature of the subject on the forums. Please understand.

All I will say is that in order for assets to avoid Probate, assets must be titled to a Trust. Also, as an FYI, owners of LLC's are considered "members". As such, owners in a LLC own membership interest. Owners in a Corporation own stock.

Of course nothing said above constitutes legal and/or tax advice.

If you have further questions, feel free to PM me.

Steven Hamilton II Nope, not an attorney. I am a CPA, per my profile. Anything I say on this forum is not legal and/or tax advice and one should seek professional advice from a qualified professional. I do a lot of Estate/Trust planning with my clients, and frequently work together with client's estate planning attorneys in structuring an Estate Plan. However, Steve, as mentioned above, you should seek a qualified professional for advice as needed.

I'll speak on your point regarding protecting your assets and passing them on to your children. Hold all your assets in a Trust. Anything not titled to a Trust will be subject to probate. If you open a LLC, make sure your membership interests in the LLC are held through your trust. Every investor should have a Revocable Living Trust. You don't want your assets passing through probate.

@Gilberto Grajeda Absolutely, my pleasure. I could tell you now that a Gift Tax return, Form 709, is a Federal filing requirement and is filed with the IRS; in other words, it does not matter where you live. While it is true that at the state level things are done differently sometimes, I can tell you right now that the only state that has a Gift Tax is Connecticut. In other words, when it comes to Gift Tax Filing Requirements, states don't have one, unless you are "lucky" enough to live in CT.

You cannot deduct principle payments. Think of it this way - you received the loan tax-free. It would be a double tax benefit to get a deduction on paying back the loan principal.

@Jeff B. I hate to be the bearer of bad news, but your CPA/EA is misleading you. It is time for you to find a new CPA who knows what they are talking about.

Section 179(d):

Let's take a look at IRC Section 50(b):

There you go. If you have any questions, don't hesitate to ask. Happy to help.

It has to be in the same name. Assuming your wife is a member of said LC, why don't you have her "contribute" the property to the LLC via quitclaim deed? Then complete the 1031.

If you sell the property within 12 months, then the gain is subject to short term capital gain rates such are the same ordinary income rates. Assets held for longer than 12 months are taxed as long term capital gains, and receive capital gain tax rates.