All Forum Posts by: Bob Norton

@S Lord As @Anthony Wick say, you need to deposit it (or equivalent funds) into a rollover IRA within 60 days of the date the check was issued. If they withheld any taxes, then you will need to deposit an amount equal to the tax deduction into your IRA as well. Otherwise, you will pay penalties and taxes on the tax withheld.

@Shaun Hunt It sounds like you sold the property to him when you transferred title to him and took back a note.  This is an installment sale and you will owe taxes on the gain of $26,000, which is the difference between what you paid ($15,000) for the property and what he will remit to you ($41,000) in December.  Whether or not your gain will be long term or short term depends on how long the period was between when you purchased the property and transferred it to him.

@Edward Prochilo Don't touch the 401k - you'll regret it later and you will owe taxes on the withdrawal.  You need to figure out how to make $1,500+ more in income each month that doesn't require you to invest much cash.  Wholesaling real estate?  Second or third job?  

@Inmer Manzanarez You may want to deposit an estimated tax payment while you have the cash from the flip, so that you don't spend the money before tax time.  Check with your CPA to estimate the taxes that you may owe on the flip so that you'll know how much to deposit, or how much you should set aside for taxes.

@Veritas Harmer Since the property is located in MO, I would setup the LLC in MO. If you set it up in IL, then you would have to register it in MO, and that will result in you paying extra registration fees, annual fees, and possibly registered agent fees. For tax purposes, the LLC will be disregarded, if you are the sole member, so the rental income will be reported on your individual tax return. The others in this post have done a good job in explaining how you will be taxed and your tax would be the same no matter which state you register the LLC in.

@Maximilian Glodde Yes, that is the basic information that you need, and you can probably download a simple form for a promissory note from the internet.

@Ebuka Atueyi That wasn't obvious from your original post.  You should definitely check with a local tax adviser and/or attorney to determine what the best structure would be for your business.

@Maximilian Glodde Repaying a loan does not create a tax issue.  However, interest-free loans between related parties might.  Create a promissory note to document the transaction and specify the interest rate.  If you want a low interest rate, then use the most recent IRS Applicable Federal Rate (AFR) for the loan.  Repayment of the loan in accordance with the terms of the promissory note will avoid most tax issues.  

@Mike C. Terms for commercial lease commissions are negotiable.  Most agents ask for the commissions to be paid up front.  Most landlords want to spread the commission out over the term of the lease.  

@ShaVontze Young That depends upon the bank you are working with.  Talk to all the banks in your area.  Some community banks will refinance with a signed lease.  Most banks will require the property to be leased for several months.  Some banks will require it to be leased up to as much as a year before they refinance.