All Forum Posts by: Shaun Hunt

Our luck has been the same. Every purchase we made, that the previous tenants had cats, has been a nightmare! One tenant had his cat locked up with him in his room all day. The tenant would sleep, play video games and the work a little outside the home. Upon purchasing the property, he moved out and holy cow, that room was an absolute disaster! 
Most of you can imagine the smell and mess, so I will spare you the details. Needless to say, the home wasn’t livable because of the one bedroom.

Now, the current tenants have a Rottweiler, which has been approved. My problem is that I just found out they sneaked a pitbull and another renter. Supposedly, they will only be there two more months. Should I make a stink about it or just turn a blind eye?

I have my kids do work on the rentals with me.  Two are now 18+. I am learning that they need a 1099 for work completed in 2019.  Are there any hints on how to go about this?  The IRS instruction page was 13 pages in length.  I was hoping for some clearer answers as to what was needed. 

Do my kids need to apply for EIN, TIN or any other numbers?

How do I file 1099 with IRS?

What else would be helpful to know?

If my kids, under 18, make just over $12,000, with they need to file taxes?

Thanks for considering a response.

@Michael Plaks

Thanks for taking the time to respond.  I was waiting on a response from the title company, here is what they said:

Shaun, you were in 2nd lien position on the lot, as part of that there was a Trust Deed recorded and a note signed. So at closing the seller will just be paying off the note to you. We will not be issuing you a 1099 because you are not the seller. We will record a reconveyance to release your trust deed on the property once you have been paid. 

Does that help?

This is what was recommended by a local accountant.  Would "memorialize" be better?  Thanks for everyone's help on this.  Looks like I still have lots to learn.  Most of you have forgotten what I will ever know about this.  It sure is nice to be able to ask a question and get rapid results!  Bigger Pockets Rocks!

We will treat the sale as a capital gain since you are not in the business of fix and flipping properties. We will treat it is as in investment instead. Thus it may be taxed at 0 or 15% on the net gain (sales price minus your cost basis). Technically you need to report the income when you receive it because you are a cash basis taxpayer.

@Eamonn McElroy

Would you mind explaining 'memorialize"? I will look into that, for sure.

@Steve Vaughan @Ashish Acharya @Account Closed

First of all, thanks for responding.  You brought up some great questions that I will try to find out within a few hours.

Essentially, this is how the deal went down.  I had a property for sale, my broker, and friend, said that his contractor would like to build a house on that land. I would sign the land over, he would build a house, then I would get paid.  

It is now getting close to the getting paid part.  

I'll try to find out if it was a quit claim and I believe that I have a second lien and the hard money lender has a first lien.

First of all, thanks for reading this post. Here is the long story made short.

#1 I purchased a half acre lot in 2012 for $15,000

#2 I teamed up with a builder and signed my property over to him, he then got a hard money loan from someone else to build a home.

#3 The home will be done and sold by December 23rd, just a few days from now.

#4 The hard money Leander has the first lien and I have the second lean that needs to be paid once house is sold.

#5 I am supposed to collect $41,000 for the sale of the property.

This is where I have a few questions. 

I was hoping to receive payment in January in order to pay taxes on the increase next year, since I have already sold a house this year and was the buyers Realtor on two other homes. I asked an accountant and was told that it depends on when the 1099 is issued.

Come to find out, I won’t be getting a 1099. The way I understand it, when I signed the property over to the builder, he became the owner and I don’t own the property any more. So, when the house sells on December 23rd, I won’t get a 1099, because the property is not being sold, because I can’t sell what isn’t mine. Does that make sense?

#1 So, when I receive payment, how is that recorded since I won’t be receiving a 1099?

#2 would it now be possible to delay payment from title company until January 1st because no 1099 will be issued or will a the closing date of the home be when it has to be claimed?

#3 what form will have to be used on taxes?

Your help would be appreciated. Thanks!

Well, he left and didn't destroy the place.  He overstayed three days.  I am now working on a disposition of deposits and hope to do it right.  I was able to find a new tenant, faster than I thought I would.  His lease starts 25 days after the evicted tenant moved out.  

The tenant had two remaining, paid days in October and I will have 23 unpaid days in November.  

The notice to vacate mentioned that if he stayed longer than the three days, the amount would treble. (3 times the amount)

Can I charge him treble for days 4,5 and 6?