All Forum Posts by: Susan O.

Follow up If you're house hacking could you live in one unit for 2/5 years then another unit for 2/5 years? Would that work for a triplex that you could then say you have 2/3 capital gains exemption?

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Is the 2/5 yearsale of primary residence capital gains tax changed?

My accountant has said it's now 5/8 years that you must live in to do the tax free sale.

Is this true?

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Originally posted by @Erik W.:

@Susan O., no, don't take your name off the Deed. The loan will still be in your name, but you will have zero interest or security backing it up. That can go wrong (badly) in several ways, some of which have nothing to do with your son's action or inaction and some that do.

Have him refi and buy you out. If he is as faithful of a loan payer as you say he is, he should be able to do it. If not, then it would be unwise for you to give him 100% ownership while keeping your name on the loan.

Regardless of refi or no refi, it is likely that deeding away your share will trigger a gift tax, which is why he needs to buy your share of the equity out for enough $$$ to be viewed as an "arm's length" transaction. Why is that important?

The IRS will figure you have a 50% ownership stake in the property, unless you drew up a partnership agreement BEFORE purchasing the unit that specifies you have less of an interest. They don't have time, ability, or interest to verify who made the payments. Think about it: from the IRS's point of view, how can you prove your son made the payments with his own money? Maybe you were slipping him cash under the table to make the payments. They don't know, they don't care. Who owned what percentage of the asset is all they can factually verify, and they can verify if that equity sold at close enough to Fair Market Value to be considered an "arm's length" transaction or was the equity gifted?

If you insist on doing it, yes, at least hire a professional (CPA and attorney) so they can set up something to protect you. There are literally a dozen ways this could turn into a mess worse than it already is. Sorry to be the bearer of bad news.

Thanks Erik and others

I'm not worried about him having 100% ownership with me still on the loan. I am going to give him everything at end anyways.

II just want to take myself off title as he's paying for the loan as well i just helped him qualify

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I bought a property with a family member (son) and want to put it just in the sons name

We bought it in 2016 as Joint tenancy. For him to get loan I put my name on property, but he made all the payments for the property. Also, I gave him a loan for part of the downpayment that he has been paying me back at 4 %

I wanted to quit claim him off my share. I just wanted to make sure 1. this won't raise property taxes 2. they won't make him do gift tax.

I didn't contribute anything to him except help him qualify for loan and give another loan for downpayment.

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Originally posted by @Lorin K.:

https://vancouversun.com/news/local-news/small-businesses-feel-crunch-after-rise-in-metro-vancouver-land-values

https://www.straight.com/news/1012191/restaurants-and-stores-art-galleries-heres-long-list-businesses-vancouver-bid-farewell

Lorin this sort of knee jerk reaction to escalating rents will lead to more issues.

Statewide rent control just passed in California and Caliofrnia usually is the first then it crosses like dominos to other states.

They're discusing this in Massacheusets, Colorodo, Florida Washington, Oregon, Minnesota, Ohio etc. The democratic party will try to push rent control into those states next

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https://www.latimes.com/local/lanow/la-me-rent-increase-cap-eviction-20190409-story.html

All these people who like free stuff! I want free cars limit my car payment! Limit my steak dinner! I want to live near Hollywood Hills! Cap my hollywood hills rent!

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Los Angeles County, California

Originally posted by @Michael T.:

Yes, it's disappointing to have rent control anywhere in California and this is why it's so important to buy an investment property at the right price.

We know here in California we don't necessarily buy for cash flow but for appreciation.

Thanks Michael

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Los Angeles County, California

Originally posted by @Syed H.:

Lol the name does not matter

What does matter?

I heard intent matters and if your name includes the intent wouldn't that be part of an argument?

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$500 to $500,000 but it depends on the deal

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I was wondering because of the "trader status" if you sell too much real estate if it's better to put the word Apartments or Rentals in the name instead of a generic name

Like Outback Apartments LLC instead of Just Outback LLC so it shows that your 'intent was to hold it long term'. Shows more proof?

This is because I hear if you buy and sell properties often in one LLC you can be hit with IRS 'trader status' making it so you get taxed on short term capital gains ordinary income VS long term capital gains. When you sell even a rental.

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All Forum Posts by: Susan O.

Susan O. has started 69 posts and replied 547 times.

Post: Sale of Primary Residence Change to 5/8 years?

Post: Sale of Primary Residence Change to 5/8 years?

Post: Quitclaiming one person off joint tenancy- family

Post: Quitclaiming one person off joint tenancy- family

Post: New and Expanding RENT CONTROL in California! Pass On to others!

Post: Los Angeles County Rent Control

Post: Los Angeles County Rent Control

Post: LLC names For showing that you are a "Rental Owner" not "Trader"

Post: Typical closing costs for a wholesale deal

Post: LLC names For showing that you are a "Rental Owner" not "Trader"