You can't be held liable to replace the building unless you caused a fire and that is a liability issue not a casualty matter.Sounds to me that your farm is more of a residence that you can farm rather than a large corporate farm operation and the owner is pulling one to get the tenant to insure his improvements calling it commercial.

Real Estate Investing Abbreviations *REI Abbreviations* *AFD* - Agreement For Deed *AITD* - All Inclusive Trust Deed *APR* - Annual Percentage Rate *ARM* - Adjustable Rate Mortgage *ARV* - After-Repaired Value *BOM* - Back On Market *BOR* - Board of Realtors *CAD* - County Appraisal District *Cap* - Capitalization *CCIM* - Certified Commercial Investment Member *CCR* - Conditions, Covenants, and Restrictions *CFD* - Contract for Deed *CLTV* - Combined Loan To Value *CMA* - Comparative Market Analysis *COCR* - Cash on Cash Return *COF* - Cost of Funds *COO* - Certificate of Occupancy *CRB* - Certified Residential Broker *CRE* - Creative Real Estate *CRS* - Certified Residential Specialist *DBA* - Doing Business As *DCR* - Debt Coverage Ratio *DOS* - Due On Sale Clause *DOT* - Deed of Trust *DSCR* - Debt Service Coverage Ratio *FCRA* - Fair Credit Reporting Act *FFE* - Furniture, Fixture, and Equipment *FHA* - Federal Housing Administration *FHLMC* - Federal Home Loan Mortgage Corporation, Freddie Mac *FMR* - Fair Market Rent *FMV* - Fair Market Value *FNMA* - Federal National Mortage Association, Fannie Mae *FRBO* - For Rent by Owner *FSBO* - For Sale by Owner *GMAC* - General Motors Acceptance Corporation *GRM* - Gross Rent Multiplier *HELOC* - Home Equity Line of Credit *HML* - Hard Money Lender *HOA* - Homeowners Association *HUD* - Housing and Urban Development *HVAC* - Heating, Ventilation and Air Conditioning *IRA* - Individual Retirement Account *IRC* - Internal Revenue Code *IRR* - Internal Rate of Return *IRS* - Internal Revenue Service *L/O* - Lease Option *L/P* - Lease Purchase *L/S* - Landlord Seller *LIBOR* - London Interbank Offering Rate *LLC* - Limited Liability Company *LOC* - Line of Credit *LOI* - Letter of Intent *LP* - Limited Partnership *LPOA* - Limited Power of Attorney *LTV* - Loan to Value *MAI* - Member Appraisal Institute *MAO* - Maximum Allowable Offer *MIP* - Mortgage Insurance Premium *MLS* - Multiple Listing Service *MUD* - Municipal Utility District *NAR* - National Association of Realtors *NIV* - No Income Verification *NNN* - Triple Net Lease *NOD* - Notice of Default *NOI* - Net Operating Income *NOO* - Non-Owner Occupant *O/F* - Owner Finance *OO* - Owner Occupant *P&S* - Purchase and Sale *PITI* - Principal Interest Taxes Insurance *PMI* - Private Mortgage Insurance *POA* - Power of Attorney *PUD* - Planned Unit Development *REI* - Real Estate Investing / Real Estate Investor *REIA* - Real Estate Investors Association *REIT* - Real Estate Investment Trust *REO* - Real Estate Owned *ROI* - Return On Investment *RTO* - Rent to Own *SFH* - Single Family House *SFR* - Single Family Residence *Sub2* - Buying property subject to existing financing *T/B* - Tenant Buyer *TAA* - Texas Apartment Association *TAR* - Texas Association of Realtors *TIL* - Truth In Lending *TREC* - Texas Real Estate Commission *UBIT* - Unrelated Business Income Tax *UCC* - Uniform Commercial Code *VA* - Department of Veterans Affairs / Veterans Administration K Marie Poe, WDYT?

I am licensed broker in California, work in corporate real estate finance, and am ready to start investing in my own real estate portfolio.

or you were absolutely certain the property will sell for less than your un-depreciated capital costs {not typically the outcome we desire when selling}.The reason for this is that the CCA (read: depreciation) will be recaptured at the time you sell the property {the delta between the depreciated value and the un-depreciated capital costs or the sales price (whichever is lower)} and added to your income for that year.If you hold the property in a corporation, the corporation would typically claim the CCA since passive income in a corporation is taxed at the highest marginal corporate tax rate; meaning the tax rate at the time of sale will be the same, so you may as well pay those taxes using tommorrow's dollars than today's.

I am a buy and hold investor looking for properties that will appeal to corporate or relocation clients.

I have received a letter from EDCO Disposal Corporation stating that my tenant is past due on several payments, and that if the amount is not paid in the next 30 days ( by the time I got the letter it would be only 20 days left), a lien may be placed on the property for the unpaid amount plus administrative fees.I have no agreement for their services with EDCO for this property.

Non-profits don't buy at the drop of a hat, they will have to have a corporate need for the space, just as any other buyer would.

ryan, in other words you are suggesting to threat it as a corporation and file separate tax returns.

If there is another member of the LLC, then the LLC isn't passed through to you.DISCLAIMER: Neither an attorney or a CPA, just speaking from my own interactions here.The LLC is flexible in that you can pass through the income to your personal returns similar to a S-Corp, or you can elect to file it as a company separately.

So you might want to consider a corporate set up where you can minimize those taxes.