All Forum Posts by: Account Closed

First, you might want to do some searches on complaints and problems with QuickBooks.

Before you do anything, find out what a Limited Liability Company is and what it does.  And don't get the information from a forum.  Go to some NC Law Firm websites and read about it.

An insurance policy is often a magnet for a certain type of lawyer, and the absence of an insurance policy is a often a protection against them.  If you make sure that all of your assets are encumbered to the max, and a few other techniques, you can be sure that there is nothing there to levy on in the event of a lawsuit judgment.  But until you learn this level of business planning and management, an insurance policy might be a good idea.  Just be ready for the insurance company to pay off a groundless claim for $10,000 because that is cheaper than fighting it, and then raise your rates.  Just saying.

Dave Foster:

That's the good thing about the BP forums.  It is like a supermarket.  Members can find what they are looking for, check out each product, look at the brand, and decide what to buy.

If they believe that they are not entitled to LTCG treatment on the sale of a rent house they owned for two years because when they bought it, their intention was to re-sell it, but they rented it instead, then they should not report the sale as a LTCG transaction, and they should not try to do a Section 1031 Exchange.

But as a former IRS Tax Examiner and a current Tax and Real Estate Attorney going on 33 years, and licensed in three states and the District of Columbia, I am not aware of single sentence in the Internal Revenue Code, the Treasury Regulations, Private Letter Rulings, U.S. Tax Court cases, or Federal District Court tax cases that would support that conclusion.

And on the thousands of tax return forms I have completed, I have never seen a box to check, or a question about, "intent."  And in the number of Tax Audits I have handled for clients, believe me, the Agent was not the least bit interested in the taxpayer's intent, only what he actually did.

But it is good to have a diversity of opinion, so the members can decide for themselves.

Emmett Gorman:

If you look at the Cronin article, posted about a year ago on BP, and look at his footnotes, you will see that his research involved reading content already posted on the internet, and repeating that in his article.  And this is the problem we are faced with today.  Incorrect information is being repeated, with no malicious intent, but with some unfavorable results.

The simple fact is that Section 1031 concerns the deferring of Long-Term Capital Gains taxes on property that is being held for investment.  Long-Term means at least a year and a day.  You cannot defer taxes on Short-Term Capital Gains.  And your "intent" after a year and a day is totally irrelevant.  What matters is what you have actually done.

I hope this helps.  Let me know if you have a follow-up.

That is the most unbelievable load of claptrap I have heard in my 32 years of practicing law.  But I was notified last week that I won the Irish Lottery and I am sending some of that money to a Nigerian Prince so he can bring his inheritance to this country, so I am expecting to receive about $10 Million from the Prince soon, and maybe I'll get back with you.

This sounds like gibberish to me, Otis.  We all know what an Installment Sale is, and it has nothing to do with a Trust.  Are you actually talking about a Trust, with a written Trust Agreement, with a Trustee, with a Beneficiary, with a Corpus?  And what is a Deferred Sale?  You either have a sale or you don't have a sale?  What is all this in plain English?

Great information.  Thanks for sharing.  This is how it actually works in the real world.

Just for the sake of a full discussion, and having seen this situation from inside the IRS myself, think about this.  As far as the IRS is concerned, here is someone with a transaction completely in his name and he has made a profit and he is saying, "Wait a minute, that's not all my income.  Some of it is someone else's income."  I know you are not doing this, but look at it from the point of view of the IRS.  They are not even likely to allow you to claim the existence of an Partnership when all of the documentation is in your name.  You will certainly get a letter called "Request For Additional Documentation."  They are paranoid about tax liability being shifted from a high-income individual to a low(er)-income individual.  I repeat, I know you are not doing this.  But you can see how they might be reluctant to just say, "OK."  BTW, a tax practitioner will spend the first seven or eight years of his professional career making decisions for his clients based on his knowledge of the law.  Then he starts to add practical reasoning to fit the circumstances and the quality of his services increases dramatically.  Whomever you get to handle this for you, it might be better to look for someone with 10-15 years experience.  Good luck. 

If you sell the property, report the sale, pay the taxes, you have met all of your legal requirements.  I repeat, the IRS has their money, and they do not want to know about you and your Uncle.  They don't have the budget to enforce half of the responsibilities they have been saddled with, and they must focus on the big dollar situations where there is some return on their investment of time and expenses.  If you want to get them involved with the situation between you and your Uncle, go ahead.  You'll learn a lot about the Gift Tax under U.S. law, and a lot about Canadian tax law.  But, as a practical matter, all you have to do is report the sale and pay the taxes.