All Forum Posts by: Christopher Smith

In california you can do it without a partnership filing, but we are a community property state.

Usually a living trust is treated as a disregarded entity, and a husband and wife LLC if established correctly can be treated as a qualified joint venture so it seems as if you could report your combined rental activity directly on schedule E (i.e., no partnership reporting required).

But I'm guessing as I've never seen this in practice, but I'm sure others have so let's see what they say. There may be other non tax considerations as well.

If you separated them shortly after purchase I would probably just allocate your total purchase basis in proportion to the FMV of the individual two plats on the date of separation. That absent any other unusual facts.

There are plenty of sample agreements (real and hypothetical) that can be found online if you are just wanting to get a sense of what one might look like that is similar to your fact pattern. I built mine off an online agreement and it worked perfectly fine after tweaking it for the additional terms I wanted in my agreement. However, I've worked with agreements for a number of years so I wouldn't use that approach for a final agreement unless you have that background.

I can't speak for every situation in every state, but I've never needed an attorney to close on an out of state property. I simply provide a POA to my folks on the ground (usually my local PM).

Simple as pie and massively less expensive than paying for an attorney's time. Plus I've never seen (and may never see) any of those properties in person, and that covers many years now.

You need to understand what triggers a reassessment in your jurisdiction. The rules are as variable as the jurisdiction, each one is different. 

You may be able to appeal the reassessment, but whether you can do it and how successful that will be will also depend upon local law.

Its really up to you, it's a contractual relationship so you can arrange it as you see fit. As to what makes sense, you might ask some reputable property managers in your area how they address the issue. 

My CA PM requests that tenants change light bulbs, batteries and filters (although he checks these items once a year himself on annual walkthroughs), but won't let them touch anything else. My OH PM is a more flexible and deals with these things tenant by tenant on an ad hoc basis. 

Both methods have always operated efficiently so I let the PMs proceed accordingly. 

I did a true simultaneous exchange of rental properties of relatively equal value this way once (2010 time frame, no cash exchanged hands, 1,000 attorney fee to process all the local title filings). 

I reported it as a fully qualifying 1031 exchange, and it was never challenged. The other party did as well, and it was never challenged.

Since it was a true simultaneous exchange with no cash changing hands, I saw no need to employe a QI in the transaction. It was mostly a DIY affair, but it worked (or at least the statue of limitations has passed on it).

Can't really comment without some research on what impact you being a South African citizen might have on the transaction consequences.

What was your intent when you bought it? 

I'm thinking that's a highly localized determination. Where I live a sale virtually guarantees a review, but that's because of the unique aspects of our state and local law.