Forum Replies Created
July 8, 2008 at 4:54 am #26201
I think we got our wires crossed on that last question I asked. I was asking why i would have to have a corp. or LLC as the Settlor beneficiary if I am buying from HUD or a bank REO? Can’t the bank be the Settlor Beneficiary?
DeborahJuly 7, 2008 at 6:43 pm #26199
Why do I have to have an LLC or Corp. as the Settlor Beneficiary? Can’t the bank that I’m buying from or HUD be the Settlor Beneficiary?July 3, 2008 at 6:34 pm #26196
Thanks to Jerry and Scott. I will do a search for flips and double closings. Just so you understand what I am really doing let me tell you that I am not buying property from a Settlor Beneficiary or any benefiary of a Trust. I am buying REO’s from the bank or Hud. I am buying through a broker and I will be selling through a broker.
What I was hoping I could do was to buy in my own name and then put the property in a Land Trust while it was being rehabbed. Then have the Trustee sell the property, not me, and then I guess the Trustee pays me through escrow. Therefore I am only the beneficiary of the Trust and can avoid the Dealer Status because “I’m not selling anything”, the Trustee is selling.
I’ll wait for your response before I do the search on flips and double closings.
DeborahJuly 3, 2008 at 3:41 pm #26193
Thank You Gary. Those were the details I was looking for. The only question left is:
if I hold my short term flipper properties in a Land Trust, will I be able to avoid the Dealer Status because of the fact that the Trustee owns the property not me, or for any other reason??????
DeborahJuly 3, 2008 at 12:50 am #26191
Oh, so then, the Trust won’t avoid the Dealer Status for my properties that I want to flip short term? You see I have a dual purpose for wanting to use a Land Trust. One is for long term rental property I already own and have negative cashflow on. But the other purpose is for buying short term flippers on which I am trying to avoid the Dealer Status with the IRS. Are you saying that the Trust won’t achieve that end for me?
DeborahJuly 2, 2008 at 11:51 pm #26189
Thank You Jerry. You obviously are very knowledgeable about Land Trusts. Your answers are very clear and comprehensive. And what’s best is, I understand them.
There is just one last thing that I am not clear on and I mentioned it in my last question. Here it is: as far as the Federal Gov’t (IRS) is concerned, what prevents me from being deemed a Dealer? Is it the fact that the Trustee owns the property and is the one selling the property and I as owning a beneficial interest in the Trust am not the seller and therefore can’t be a Dealer????
Deborah aka Dancer53July 2, 2008 at 5:22 pm #26187
Thank You Jerry. You were right. I did have misconceptions. I own property in FL, AL, MS and GA. So I guess regarding the “Doctrine of Equitable Conversion” I would have to research each state’ law to determine if each state recognizes the Doctrine, correct?
As to paying Ordinary Straight Income Tax under the Dealer Status, it is not ordinary tax that I am concerned about, it is the self employment tax that I think I would get hit with i.e. both sides of SS tax, Medicare, State Disability etc., etc. Wouldn’t all of those taxes come into play if I get tagged a Dealer? Or do I avoid that completely since as per a previous answer, I only hold a beneficial interest in the Trust and therefore it is the Trustee who sells the property not me. Do I have that right?
Dancer53July 1, 2008 at 3:50 pm #26184
Gary, thank you for the IRC#163,167. Do you know which IRC states that property held in a Land Trust is considered personal not real property? If we can find that one I would feel pretty confident about not getting tagged with the Dealer Status label.
Dancer53June 30, 2008 at 11:59 pm #26181
Thanks to all who responed to my questions regarding Dealer Status. It seems like the pivital issue is weather or not the IRS agrees that property held in a Land Trust, with me having a beneficial interest in the Trust, is personal property rather than real proptery. Does anyone know the section of IRS code that states this definitively?
In addition, if you are buying and selling personal property on a regular and short term basis, for example buying clothes at a thrift store and then reselling them at a garage sale. Or buying broken bikes, fixing them and reselling them. If either of these activities was your primary source of income, wouldn’t you be considered a dealer?
Dancer53May 19, 2007 at 11:56 pm #20700
At this point it looks like our spammer(s) is(are) human. The current modification should stop spam bots. My next solution is requiring login. I am going to communicate this to Bill then I will flip the switch.May 19, 2007 at 2:56 am #20677
Oh, by the way, I’m flattered by the comment from the previous post. I like Scott’s approach. I am just making offers. Some respond and others don’t. This guy just happen to respond (1 out of 4) offers I emailed out this week.
My seller came back with these questions even though everything is spelled out. It tickles me. However, I do see the opportunity to tie up this property and assist him in getting into a home in the area he wants to move in to. I was looking at how to respond or walk:
“Thank you for your quick response. I have just a few more questions about my particular situation.
My family wants to relocate closer to Grand Rapids for my job. We are looking at businesses such as yours as a quick way to sell our house without the hassle of a realtor. We wanted to use the money from the equity in this house as a down payment on the next.
Since banks figure housing costs to be 30% of a monthly income, if I am listed as one of the beneficiaries of this property after I move, will the bank I go through for my next mortgage see that and will it count against me as already having housing costs? After you assume control of this property, I will have a certain amount of time to move (I believe your paperwork said 30-60 days). Since I plan on using any money received from this house as a down payment on the next, When can I expect to receive that?
Thank you for your time.”May 18, 2007 at 6:55 pm #20697
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It works – no more spam
slap bang whacko smackoMay 17, 2007 at 12:31 pm #20660
Hi all, this is Sabrastina again! I just wanted to be specific in my previous request. I am a network member that owns 2 FL properties but live in IL. I need a ground partner that can assist me with locating an RB for 2 properties in the Orlando FL area. Please contact me @ 708-614-8526.
ThanksMay 16, 2007 at 2:16 am #20558
Thanx for the explanation.
I did look around on the forum for an answer without success and I don’t own the big book just yet. Still trying to decide if it is worth it. I see lots of people with RB, but no houses to put them in and lots of people with houses but no RBs. I ought to start a matching service for you guys sort of like a dating service for RBs and SBs, but then you folks might be calling me an SOB :). I wrote to one of your superstars who basically told me to go screw so I figured I would try for an answer from the not so frigid, opps I mean rigid.
So, my friend, for your great answer, thank you and you now have a friend for life.
You all seem to be found of quotes, so here is one for ya all,
“Do not corner something that you know is meaner than you.”