All Forum Posts by: Charles Moore
Charles Moore has started 19 posts and replied 108 times.
Post: Invest in State Income Tax states vs. Non-State Income Tax states
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Thanks for the TX state franchise info, Fred. Yes, I will be forming an LLC. I checked into it some more. Looks like for a lot of states that don't charge state income taxes, they charge franchise taxes instead, though I don't know if the amounts would be equal.
Post: Invest in State Income Tax states vs. Non-State Income Tax states
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Thanks for the replies, all. As usual in real estate, there seems to be no blanket "yes" or "no" answer. But this definetly tells me that state income tax should not be the deciding factor. Other concerns I would have are climate factors, like heavy snows in northern states that can damage the roof, or the possibilities of tornadoes in the heartland. But I should post those in a different post.
Post: Invest in State Income Tax states vs. Non-State Income Tax states
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Thanks, Jon! Since I enjoy having no state income tax now, I'm wondering if I should narrow my search to other states that also have no state income tax? Or am I losing out on opportunity in the rest of the country that provide high enough returns that make the state income tax worth it there?
Post: Invest in State Income Tax states vs. Non-State Income Tax states
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Hi, all!
Am seriously looking at buy-and-hold investing out-of-state due to more expensive markets here on the West Coast. Am located in Washington, which is one of only 7 states in the US that has no individual state income tax (the others are Alaska, Nevada, Wyoming, South Dakota, Texas, and Florida. Tennessee and New Hampshire are similar, but charge state income tax on dividends and interest income). Have narrowed my search down to Memphis and Dallas-Fort Worth, but have heard good things about Birmingham, Indianapolis, Ohio, and Kansas City as well.
So my questions: would state income taxes affect my annual bottom line, or would normal business expenses and depreciation wipe those out on paper so I would not have to pay them anyway? And if I owe nothing, would I still have to file in each state that requires state income taxes?
Post: 1031 Exchange a Rental Sale Profit into 4-5 long distance turnkey properties
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Perhaps I could buy just a single property within the next year with a cash down payment first just to test the waters, and if the experience agrees with me, I could pursue more with the 1031.
Post: 1031 Exchange a Rental Sale Profit into 4-5 long distance turnkey properties
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Thanks! I'm PMing you.
Post: 1031 Exchange a Rental Sale Profit into 4-5 long distance turnkey properties
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Yes, that would be perfect! I've read good things about your from Chris's posts as well. Feel free to private message me.
Post: 1031 Exchange a Rental Sale Profit into 4-5 long distance turnkey properties
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Yes, I'm hoping to find BP's who have been there and done that with Memphis Invest and other turn key operations, as their referrals are the most valuable! I haven't found really any negative things said about Memphis Invest, but still want to talk directly to those who took the plunge.
Post: Use Profit from Rental Property Sale to 1031 into several turnkey long-distance rentals?
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
Originally posted by @Dave Foster:
1. First of all regarding your post just above on exchangeable amount. @Jim Workman
- is correct. In order to defer all tax you must purchase at least as much as you sell (this is defined as your net sales price after costs of the sale but before mortgage payoff). And second you must use all of your proceeds in the next purchase or purchases. Any amount you buy less than what you sell is first of all taking profit in the eyes of the IRS. There is an expectation that your basis is exchanged into the next property. Purchasing as much as you sell and using your proceeds to do so will usually result in a need for similar debt. But if you have cash resources you can us those as long as you follow the two part rule.
2. Depreciation recapture is figured as part of your adjusted cost basis. Depending on where your cpa ends up on the worksheet will determine whether or not you owe tax on any of that when figuring the 121 exclusion.
3. That is largely correct regarding regulation of QIs. There is little. However slowly the industry and states are starting to adjust processes. You still want to do old fashioned due diligence on reputation, experience, and security to make your selection. One of the most significant advances in my perspective over the last 7 or 8 years has been the increase of QIs and states starting to request and require using dual signatory segregated accounts. The strength of the dual signatory segregated account is two-fold. First of course nothing can happen with your exchange funds without your signature. Second, the segregation insures that your funds are separate from every other exchange in process by that QI.
So for item #1 (exchangeable amount) in your last post, the numbers I'm predicting are a condo sale price of $260,000. Looking at purchasing, say, 5 properties each around $90,000 for $450,000 total, well within the 200% rule. Estimating I'll have $75K proceeds from sale to divide up between down payments on these properties (can throw some cash in to level things out). Sounds like this is all playing by the rules, right?
And for your third point, thanks for clarifying!
Post: Use Profit from Rental Property Sale to 1031 into several turnkey long-distance rentals?
- Investor
- Lake Forest Park, WA
- Posts 108
- Votes 35
not sure I follow. The exchangeable amount would be sale price - mortgage payoff - closing costs - excise tax (here in WA) for an estimated $75K.
What does your scenario look like?