All Forum Posts by: Christopher Smith

Capital contributions by the partners should increase tax basis in their partnership interests.

I just drop my various annual property management reports into a very basic customized excel spreadsheet that facilities Sch E reporting on TurboTax. Never needed more than that in over 20 years.

DST arrangements

Right it (and the related instructions) should tell you if the property qualified for installment sale treatment and how to calculate the periodic gain if so.

Pull out the installment sales tax form and instructions, you should find most of your questions answered there.

Single member LLC is disregarded for tax purposes so presumably no reset.

Single member LLC?

You better check that out, CA assertion of LLC taxation is massively broad (both CA and out of state formed LLCs), especially the minimum tax charge. CA nexus rules may really surprise you.

What is your long term strategy for disposition of the replacement property? CA has a law specific to 1031 exchanges, if you exchange a CA property for an out of state property and you later sell that out of state property then CA may assert the right to claw back (tax) the gain attributable to the CA property that would have been realized if it had been sold rather than exchanged at the date of the 1031 exchange.

In this regard you may have annual reporting attributable to the out of state replacement property so CA can track what you have done with it. If you have sold it CA may tax the CA deferred gain on the prior 1031 exchange.

Not sure what the answers are but I do wonder if the transfer is not immediately taxable in CA, whether the LLC will be subject to the $800 CA Franchise Tax Min charge, and whether CA will require you to pay income tax if you later dispose of the replacement TX property in a taxable transaction.

Might contact a local property manager, I'm sure they can at least give you a vacancy assessment based upon the neighborhood. A thorough inspection of the property should tell you most of the rest.