All Forum Posts by: Simon Filip

Chris L. When you sell the rental property you allocate sales proceeds to the land and building based upon fair market values . The unrecaptured 1250 gain cannot exceed the depreciation you have taken on the building. However, it also cannot be greater than the fair value (allocated proceeds) of the building. If there is truly no value or nominal value to the building the 1250 gain (amount you will be taxed at 25%) will be limited to that value.

If the LLC was a partnership it should continue to exist and you should continue to receive a Schedule K-1.

One of the benefits of transferring the assets to the trust is avoiding probate. There still may be a will if all of the assets were not transferred to the Trust. If you are a 15% member of the LLC that asset still belongs to you. You may not receive any additional assets, but that all depends on the legal documents.

You may have been given your inheritance when the LLC was funded. An estate planning technique is to transfer the assets via gift so that any increase in value escapes estate taxes.

@Natalie Kolodij you are correct 25% not Ordinary.

@Mike McGuire you may be confusing a couple of different issues.

If I understand correctly you are a member of an LLC. Does that LLC still exist and hold assets?

Did your grandfather have an interest in that LLC? When the estate is administered his interest in the LLC will need to be distributed in accordance with the Trust agreement (if it was held by the trust you referenced) or according to his will.

If there are assets outside of the LLC if your mom is the executrix and should administer the estate in accordance with the will. Also, a will becomes a matter of public record once it is probated and therefore hard to hide.

I see your local feel free to contact me to discuss further.

@Eric Peterson if you qualify for the principal residence exception, which has been referenced (2 out of 5 years) you will still be required to recapture any gain attributable to depreciation taken on the property during the period it was rented.  This recapture is at ordinary income tax rates.

@Joe Deemer I believe you are referring to the "sting" tax on net passive income. That applies to S Corporations with accumulated earnings and profits. An LLC that was previously taxed as a partnership making an 'S' Election will not have accumulated earnings and profits.

Like everyone else has said in this thread always best to consult an adviser as I may not have all relevant of the facts.

Never received any responses. I'm guessing Bergen County inventory (Paramus especially) is light.

Does anyone know of any wholesale or foreclosure inventory specifically in Paramus New Jersey?
Please private message me

Simon Filip CPA, KRS CPAs, LLC | [email protected] | 201‑655‑7411 |http://www.krscpas.com

@Jessica Zolotorofe is highly recommended. Her office is in Passaic County, but does work in both NJ and NY.

@Natalie Kolodij I appreciate your post, however 1250 recapture is limited to the extent of 1231 gains.   

Its important to calculate your basis in the rental property.  Don't forget to consider your closing costs on the sale (legal fees, realtor commissions, etc) as they will reduce a potential gain.  Additionally, you should review if you have any suspended activity losses.  A 1031 is definitely a viable option, but may not be necessary. 

Feel free to contact me if you would like to discuss further.