All Forum Posts by: Peter Lu

I have a property that is held as Tenancy-in-Common with my sibling on the title, let's say for the sake of example that I own 70% and the sibling owns 30%.  

Will it be very complicated to do a 1031 Exchange for my portion (provided that we relinquish the property and the sibling just receives the cash for her portion)?  

A few additional context that may make this a bit more complicated:

- ideally the 1031 exchange that I do will then add my wife to the picture with the trust that we have established (however it's easier to do)

- the property was previously used as our primary property, but is now a rental property for at least 4-5 years

- an alternative is the sibling is open to gift annually up to the gift limit so that we own the property outright prior to the exchange, but that will take quite a few more years

Thank you!

I have been mostly managing the rental properties on my own and more recently, after studying a lot more on the tax benefits, I realized that a couple of the trips that I take to meet with my property management companies can be deducted.  Over time, I want to start involve my spouse in parts of the business decisions and/or record keeping since we tend to travel together.  What's the right way to make that happen?  some say to put her on the payroll, but I don't have any business entity right now.  is that the only approach?  or if we start tracking how she is contributing to the business decisions, that would work as well?  Thank you in advance for this great community!

@Andy Webb Thank you so much again!  What a great way to retire!  Best birthday present ever indeed!  :)

@Andy Webb - thank you so much for taking the time to answer my question, and yes, I am looking forward to the day that I am no longer tied down by the W2.  :)

A couple of follow up questions:

- how did you find the health insurance broker?  how are they incentivized?

- how did you decide when to stop working?  e.g. is the best time to transition at the end of the year?  just so that your next year's income will not include any parts of the W2 income?

Thank you again for giving me hope.  :)

I know the answer is likely talk to your CPA, but I am hoping that someone can shed some lights on this.  I know a lot of it depends on a lot of dimensions, but I'll try to be specific as possible.

I am considering early retirement, I have a few rental properties, we are pretty frugal so we think that potentially early retirement is possible.  the one thing that concerns us the most is just the health insurance cost.  however, we are in WA and when looked into the marketplace, it asks you what your annual income would be, and as people here know, rental properties have very good deduction which makes the MAGI number pretty low once you don't have a W-2 income.  but I want to make sure I am understanding this correctly.  because it looks like after I go without my W-2, the MAGI, which is typically just line 11 of 1040, if that essentially drops to pretty low, e.g. <$60k a year, then it looks like that's the income that it is asking for to determine what premium I'll have to pay?  is my understanding of that correct?  Thanks!

I have been reviewing a lot of videos and content on 1031 since I am interested in doing one sometime next year.  With a lot of experts here, I am hoping to ask some questions that I have not been able to have a concrete answers for:

1) if I want to transfer from 2 properties to 1, 1 property is currently under my name only (acquired before marriage) and the other 1 property is currently under a revocable living trust with both my wife and I are the trustees, is this allowed to transfer to a single property that is with the title also with the trust?  or do I need to first make the title for the property under my name only to move under trust before doing 1031 to minimize any issues?

2) I have seen conflicting information about doing 1031, then after a while, turning that investment property into primary residence, and then sell that primary residence under the capital gain exemption (2 years out of 5 years rule).  Some people say this is allowed while other say it is not.  Which one is correct and what's the duration of each one of these stages?

3) I have seen a lot of online Qualified Intermediary, but it's hard to know which ones are credible vs not.  Can someone here who have experiences with using QIs recommend one?  I am in the Camas, WA area.

4) I have read that some closing costs and commissions can be part of the 1031 consideration.  I just want to anticipate how much free cash I need in preparation for the 1031 exchange.  for example, let's assume that I am doing a simple 1 to 1 exchange.  And let's say that my current property is worth $500k (with no mortgage).  There are likely fees associated with selling of that property such as commissions, filings, legals, etc.  I know the new property typically have to be equal or greater to that amount, but is it equal or greater to the amount minus these other fees?  so let's say if all other fees add up to $50k, do I just need to find a property that is $450k or higher?  Also, there are fees required when buying the new property so will that further lower that requirement?  what's a good rule of thumb on the new property value if I want to minimize overall out of pocket costs (some are ok, but just not a whole lot).  And do Qualified Intermediary help you sort these out?

Thank you so much - I am learning quite a bit here!

hi everyone, I have been investing in real estates over the years without really knowing how to tap into any networks.  I love Camas, WA area and would love to meet any like minded people to share and discuss.

I am also curious to see if there are great real estate related CPA here that are highly recommended?  I have not had great experiences with CPAs in general, where majority of the time I am doing the same amount of work for them as I would using TurboTax, and the outcome is pretty much all the same besides that I just get charged a lot more.  I thought maybe that was just my initial experience, but one time I gave it another try, the CPA essentially told me that I have everything so organized that I really don't need her.  I have heard great stories about how good CPAs are able to strategize with you, inform you how to structure your properties and assets to maximize protections and minimize tax, but it sounds so much like a fairytale that I have not had any personal experiences with them.  Maybe it will change now that I have a community of likeminded people to turn for advice.  :).  Thanks!