All Forum Posts by: Jeni L.

Where did the formatting go?

Sorry y'all - I had bullet points to make that post easy to read.  

I'm setting up a new partnership for the purpose of wholesaling.  I want to make sure I'm structuring the business effectively for tax purposes.

New Wholesale Business:

• located in GA (LLCs are easy)
• 2 person partnership
• assignments and/or double closings only (no flips/holds)

I have other business interests so I will be high tax regardless.

• majority owner of S-corp for IT consulting
  • W2 for my "reasonable salary" plus shareholder distributions
• LLCs (and trusts, etc) pass through for owning rentals
• LLC pass through for rental property management
• LLC pass through for note holding

This wholesale partnership will be the sole source of income for my partner.

My primary concern is whether separate business entities prevent my rentals from becoming "inventory" when the partnership gets treated as a dealer.

It seems a basic S-corp is the way to go with regard to earned income to minimize SE tax.  I'm sure partner and I can figure out a salary schedule even though this venture is straight commission. Thoughts?

Thank you!

I hold, buy, and sell rentals.

I've got some interest in some low value properties I have for sale, and I'm negotiating a contract on a much higher value property. I can 1031 exchange up.

Just wondering if there's any tax benefit to the seller of a high value property to take a low value package as a part of the deal. It might help offset his taxes. We're dealing in 7 vs 6 figures here.

That was my understanding. Thank you.

I was also under the impression that you could defer the taxes on the net sale while being taxed on the difference. That could maybe make a difference for someone.

Let's say Adam has his $75K rental.

Charlie has a $500K multi-family rental.

Adam trades cash plus property to Charlie. Adam gets a 1031 exchange.

Can Charlie defer a small portion of the taxes by participating in the exchange?

Does anyone understand the rules of a 1031 exchange?

Is it true the acquired property's purchase price must be higher than the net sales of the exchanged property?

If a property swap occurs of differently valued properties, is there any tax benefit to original owner of the higher value property?

Example

Adam has a rental valued at $75K
Brian has a rental valued at $100K

They swap properties plus $25K cash.

Adam gets a 1031 exchange due to higher value of new property.

Is there any benefit to Brian who now has a lower value property?