All Forum Posts by: Wilson Pereira

We don't really have anything substantial that we wanted to keep separate. I had initially asked for a single trust given the simplicity of our situation but the estate planning lawyer pushed back saying most of his clients do two separate trusts for asset protection and that he would not recommend we do a single trust. I hope all this was not just for his benefit as my spouse and I were really looking to be guided by a lawyer who specialized in this. The problem we're seeing now is most financial institutions we reached out to do not support two trusts on an account.  His recommendation was to setup title with two trusts as tenants in common. Of course, he'll probably charge us all over again to redo the trusts as a single joint trust if that's the path that we should have taken in the first place. Sigh!

For those of you that setup a revocable living trust with your spouse/partner for your real estate LLCs and other assets such as bank accounts, did you setup a single revocable trust or separate trusts? My attorney advised me and my spouse to setup separate revocable trusts for asset protection but I'm finding that some financial institutions do not allow accounts to be held in title under more than one trust. My spouse and I prefer not having to split things up and retitle ownership under separate individual trusts. Most of our assets are jointly owned. Should we reconsider our attorney's recommendation and go for a single revocable trust or is there a more efficient way to handle this with separate individual trusts? 

Thanks to everyone who replied to my post. From my experience interacting with several CPAs, not everyone is a tax strategist. That's what makes this a bit more challenging than I expected. I'm flexible working with an accountant/strategist remotely.

I was wondering if anyone could offer recommendations for both a CPA and tax strategist. A couple of CPAs and strategists I reached out to through BP are no longer accepting new clients and I would really prefer a referral through this forum. Thanks in advance.

@Dave Foster, Totally agree with your statement that it's all about the numbers. In your example if you had kept the $30k compounding at 10%, that would be one large number for sure. But then again, if you had paid the $30k in taxes and ended up with a net of say $100k from the sale, and kept that compounding at the same 10% rate, you'd end up with a much larger number. HELOC rates are high now and I expect they'd be at par or perhaps higher than what I'd get if I were to invest the equity accessed through the HELOC. 5-7 years ago this would have been an easy decision. Now with the borrowing rates being where they are, I'm not sure if that's a good financial move.

Any thoughts on completing a 1031 exchange and then taking a home equity or HELOC on the property to access equity in the new property? With rates being as high as they are currently, I'm trying to determine if I come out ahead just selling my existing investment property with no 1031 or doing a 1031 followed by a HELOC or home equity instead of locking my capital up in the 1031. The other concern is a potential market correction which if it does occur will result in me being upside down on my equity position after the 1031.

I've been following this thread as I have a similar decision I'm faced with regarding a 1031 exchange on an investment property I decided to sell. 

A bit undecided on whether to take the proceeds of the sale, pay capital gains taxes on it and invest the balance or do a 1031 exchange and replace the property with another. 

I tried to evaluate pros and cons of both options. With a 1031 exchange I get to defer any capital gains taxes but the downside is the investment is locked into another real estate property assuming I can find something suitable within the 1031 exchange timelines. There is also the opportunity cost that I miss out on by keeping capital locked up in another property. If I just sell with no 1031, I have the funds to invest right away in alternative asset classes but  have to set some aside for settling capital gains tax and depreciation recapture when filing taxes next year.

Are there any other options that I may have overlooked that make more sense from a financial and tax planning standpoint? It sounds like DST may be risky and best avoided.

Thank you to all that responded. If I understand the responses correctly, I will need a K-1 for my WY LLC that will include income/loss from NC and FL LLCs. That K-1 gets reported on my personal 1040. There was a mention of filing a 1065 for my WY LLC as well as a NC tax return for rental income from NC LLC. I believe Ashish also indicated there was no need to file tax returns for NC and FL as both LLCs are owned by WY LLC. It's clear I would need a 1065 for my WY LLC. Do I also need one for my FL and NC LLCs?

My wife and I formed a WY LLC that is an asset holding LLC and a member of two other LLCs, one in NC and the other in FL. My wife and I are the only members of the WY LLC. I have rental income for the NC and FL LLCs. My rental properties are owned by the NC and FL LLCs but my wife and I have mortgages on them. My question relates to tax filing for my personal and rental income. Real estate taxes and mortgages are paid through by LLC. Do I take the real estate and mortgage interest credit on my LLC income and expense P&L and have that roll up to my 1040 through a Schedule K-1 or do I exclude these from the individual LLC P&L and take these credits on my 1040? I understand that for LLCs everything rolls up to my personal 1040 but I'm looking for guidance on the proper way to handle this on my return. I'm also not very clear on how returns should be filed for my WY, NC and FL LLCs. The latter two are single member LLCs with the WY LLC as the sole member so my understanding is that the NC and FL LLCs will be considered passthrough. In terms of tax forms, my understanding is that my wife and I would need to file a Schedule K-1 with our 1040 since we are both members of the WY LLC. Looking for input and guidance from other members who have experience with setting this up right.

Thank you Bill.. I will check Stessa dot com out. 

Do you know if Stessa dot com handles mortgage payments P&L correctly for tax reporting?