All Forum Posts by: Tim Tucker

All of my income is passive from rentals. Therefore I do not pay any self employment taxes (15.3%). Since I have no active income, I cannot contribute to any retirement accounts.

Does it make sense to convert some of the income to active by forming a property management company. Taking a salary and using this active income to fund IRAs, Coverdell ESA or an HSA? 

The new salary would be subject to the 15.3% SE tax. Is there an income bracket or income threshold that makes it beneficial?

This would not be a case of dishonesty. One of the major reasons to transfer properties to a trust is anonymity. You don't want troublesome tenants or lawyers nosing around trying to find out what assets you own. The truth is,the trust owns the properties, not me. I'm the beneficiary. 

I want to continue managing everything. I just want the tenants to think I'm just an agent or manager. 

Scenario

15 SFRs, each owned by a separate FL land trust.

I am the beneficiary of each LT.

I manage all 15 properties.

Whats the best way to find/screen tenants, collect rent, maintain the units all the while keeping tenants from thinking I'm the owner?

1.Simply act and sign everything as an "agent" of the LT? Do I need an "agent" agreement with each LT?

2.Create a separate company that all rent and tenant requests funnel into? A sort of psuodo property mgmt company.

Other ideas?

I'm not sure where I read or heard this but it is my understanding that if a property is in an LLC, I must use an attorney to serve notices and represent the LLC in an eviction. I cannot represent the LLC myself.

I have been google searching and cannot find anything to verify that belief.

Does anyone have any info?

Is this scenario possible?

-I form a single member LLC.

-Bill and I partner on a deal. Bill buys a 50% share of my LLC. Operating Agreement(OA) states 50/50 on all expenses/profits.

-Next month, Julie and I partner on a deal. We classify this deal as "Asset B" and classify the first property as "Asset A". Rewrite the OA and say Asset A is owned 50/50 Me/Bill. Asset B is owned 50/50 me/Julie.

-Keep doing this for other partners and deals. 

Does each new partner have to own a % of the LLC?

The OA can keep the money flow in line but does this scenario complicate all parties' taxes?

Other concerns?