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Toshiki Hoshino
  • Real Estate Broker
  • Albuquerque, NM
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Refinancing UBTI Questions.

Toshiki Hoshino
  • Real Estate Broker
  • Albuquerque, NM
Posted Dec 8 2019, 14:04

Hello BP,

What are you tax consequences on below situation purchasing property under Checkbook LLC.

Purchased owner financing commercial property with 2 partners (33% ownership each) for $1,250,000 with down payment of $200,000. If we incorporate BRRRRstrategy because property is worth $1,950,000 and bank allows 65%LTV, what would be my UBTI obligation when I refinance?

From my understanding, rental income will be subject to UBTI by income minus expenses and depreciation. Is that correct?

Thank you,

Tosh

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