All Forum Posts by: Jason L.

Good afternoon,

I'm just getting started in real estate investing and I'd like to know opinion on creating an LLC for the purpose of limiting liability on these houses.

1. Is it possible to create a parent LLCs and have sub-LLCs underneath it?

2. Can you keep ALL profit in your business to stay in the businesses account and NOT draw it out?

3. If you do not withdraw the profits from your LLC is it still taxed since its not being allocated to an LLC member?

You might ask why would you not withdraw, and the reason is I'd like to keep all profits for now in the business for reinvesting and fixing things. I'd like to not spend it by withdrawing for myself (income) right now. I have a particular number I'm waiting for. 

4. With an LLC that is multi-member, you can allocate percentages on what each members draw is correct?

5. Should each house have its own LLC and are there benefits to this?

Thank you all for your responses. Jon, thanks for all the clarification. 

This question has puzzled me for some time; oddly, I cannot find an answer. 

Hypothetical Scenario: I'm a newb in real estate and I purchase a property for $100,000. Over two years, I've put $20,000 in equity into the house via paying down the principal (no improvements). After these two years, I decide to sell the house. I will sell the house for $100,000 (same as what I bought for). When this transaction is done, I will be receiving $20,000 profit thereabouts (not considering closing costs, agent costs, etc).

So here is the question: Would I have to pay capital gains on this money I receive since it technically isn't "profit"; it was money I SPENT and am merely just getting back. How do I prove this to the IRS or would the IRS even know of this transaction?

How DOES the IRS know when you made money from the sale of a house?

Alright...Strange situation. I have a friend who wanted to move into a vacant house I had. She moved in, and eventually started paying me rent. There were no lease, no agreements, etc. But she paid and has done so for 2 years. Recently this tenant has been delving into heavy drinking and living a rather unstable lifestyle, has lost job (but got a new one) and not responding to my texts when bills are due. Like an idiot, the bills are in my name as she would normally send me all the bill money and I'd just pay. Yes, I know this is dumb so spare me, but here is the question:

Since there is no lease, can I evict her without following the 30-day Indiana eviction process? What are the laws for non-lease residents? I need her out ASAP. Any information would be appreciated!

Michael