All Forum Posts by: Chelsea Monk

Ah, I love making entity structures. You've got an interesting one going on here for sure.

Your holding company will be a partner in each of the 3 groups, yes? And each of the 3 groups will have a different partner makeup? (i.e. fix n flips will have 4 partners: you, John, Susie, & Bob. wholesale/lending will have 3 partners: you, Fred, Susie. etc) If so, you're looking at 3 tax returns already.

Do you want a partner in your holding company to share your portion of the income? If not, have yourself be the sole member. Easy peasy.

Also, I definitely recommend sitting down with your tax+legal team to make sure all i's are dotted and t's are crossed in the creation of this entity structure and that you're not making it overly complicated. I've never worked with Prime Corporate Services, but I know a lot of the "big name" companies make their money off creating way more entities than are needed. Not saying that's the case here, just saying that another opinion isn't a bad thing.

That's a pretty localized thing based on the market. I have clients who end up buying 1 apartment or 1 side of a du/quad, and then I have clients getting the entire building. You can find them, chat with a realtor about what you're looking for.

Do you feel competent to do your own return? If so, go ahead & file on your own.

If you aren't comfortable filing your own, then file an extension and look for a new accountant after the deadline.

What was the county appraisal district's valuation of the land & building in 2020?

The sale of this piece of land will pass through to shareholders via their K-1s. If you're the only shareholder, the gain will all pass through to you. You'll get to reduce the gain by your selling expenses, basis of the land, and any additions to basis throughout the time you owned it. Then it will be taxed at long term capital gains rates since you owned it 10 years.

I’d recommend a consultation with an attorney specializing in these, in addition to an accountant. Attorneys I would recommend are Jeffrey Watson (Ohio, Watson Invested) or John M Hyre III (Puerto Rico). Accountants, I’d recommend @Steven Hamilton II.

Good luck!

Sure thing. What’s your question?

Yep, you understood him right. Certain expenses are added back when determining cash flow from a rental property for lending purposes. Tax benefits from rentals wouldn’t include this though. Tax benefits would be more along the lines of accelerated depreciation, REPS, just to name a couple.

I’m curious though, why the property co-owned with your parents is on a Schedule C. Is it a bed and breakfast, or is there some other specific service that’s being provided? A common mistake I see is people using the wrong schedule to report a rental property. Not saying that’s what’s happening in your situation, but it’s got me curious about that rental. Can you tell me more?

 You can if it's an active business on a Sch C. You potentially cannot if you're over a certain income level and the income is passive.

@Steven Hamilton II