All Forum Posts by: Ebere Okoye

I agree with all of the above except to say that since there are no other differences, it's best to got with the LLC because the compliance requirements are more lenient.

The main difference if it is a property held for investments is that the short term capital gains rate is your effective tax rate which can range from 10% - 35% but a long term capital gains rate is 15%. There is a set tax % for the long term but the short term is based on your individual tax rate.

I am a CPA and a real estate investor. I typically use this strategy for my clients who are able to deduct rental activities as passive investments and the accelerated deprecation does not put them over the threshold for the passive loss limitations. For rentals, it is not just about getting the deduction but being able to deduct it because you are not subject to the passive loss rules. If you are subject to the passive loss rules because you make over $100k and you do not spend more time in real estate than in any other active profession, then there is no need to accelerate.

I usually advice clients with rental properties to put the assets in a Multi-member LLC. for the protection of the equity. You can have the LLC execute a loan package on the property equal to the $250k so that there is an asset and a liability hus deterring not preventing lawsuits

You can prorate based on number of days so rental gets 2/3 and leisure gets 1/3. It is ok to divide the mileage and expenses.

Well said Anson, Could not have said it any better. When you attend the REIA's find other investors who are willing to network with you. Some maybe rude but I promise you that there are others out there that will help. There is the Baltimore REIA, The DC REIA, You can look up the group led by Kenneth Gills in Baltimore. While I love books, Real estate is a doing business. In terms of learning, focus on where to FIND THE DEALS, FUND THE DEALS, FARM (SELL) THE DEALS. I have an article coming out next week on the 14 types of real estate investing but the bottom line to all of them is how to find the sweet deal, how to finance the sweet deal, and how to exit out of the sweet deal.

Hi Carl, The best advice I can give you is that you learn this business by doing it. From m vantage point of being a CPA to real estate investors, I see a lot of money being spent on investor education with nothing to show for it. I also see a lot serious minded people making more money now in real estate than ever before. Join a local REIA before deciding to take a course. i am a member of the RealInevestors.com. I have been there for 7 years. They have the general sessions, the paid sessions and classes that you can sign up for. But one thing I do know, it's not those who spend money on education that I see making money but those who are actually doing real estate. Just my two cents. I always wonder what would happen if all the money spent on education is combined to actually purchase a property. I hope this helps

Yes, and I double checked with Satchie Carvounis (SDIRA consultant at Security Trust) that is correct as soon as the property has been 100% distributed to the IRA owner they can treat it as their own and don't have to worry about IRS guidelines. The distribution would trigger a 1099 which would result in taxes. Age 59 ½ applies to whether or not you are penalized for taking a distribution – after that age there are no penalties.

I checked with Satchie Carvounis at Security Trust and she confirmed that: No the IRS rules don't address this situation, it simply states that the IRA can't engage in any transaction with a prohibited party. However, the IRS can follow a paper trail and see what they intended to do – and that would involve engaging in a transaction with a prohibited party.

I checked with Satchie Carvounis at Security Trust Company and she agreed that: The IRA owner performing any duties or maintenance on a property owned by the IRA would be considered a prohibited transaction.