All Forum Posts by: Christopher Smith

There is a property in the Lovettsville Virginia area that I am evaluating on whether it would (or would not) be suitable to become a solid SFR rental property. From my very general understanding of the area it is an OK drive into the outer ring of WDC. Of course I live in the Bay area so anything under 2 hours one way here is great, it would be good to get a local's opinion of the commute. I lived in Bethesda once, but that was many moons ago.

Also what would the likely tenant pool be? Middle management Govt employees? Any idea of the rent ranges say on a very nice 4/5 br 3 bth built 2000 on large lot? Just balk park stuff needed at this time. Does Lovettsville have any significant business activity of its own, or is it primarily WDC dependent?

Anything else to consider (Va. landlord / tenant laws, taxes, etc.)?                                                  

Cost Segregation "amazing", that's a really good one :), reminds me of Mr. Haney from Green Acres (oh god I'm dating myself again).

There are number of different anti-deferral rules you would need to address if you plan to use a foreign organized C corporation (e.g., a GmbH) to acquire the rental property and then dispose of it after the 10 year period (for starters). Assuming that is what you mean.

That falls under the legal doctrine of "Pigs get fat and Hogs get slaughtered."

@Luke H.

I've had this discussion with my CA PM a couple of times and he has indicated to me (as noted various times above) that after 7 years it's going to take something pretty egregious to justify withholding deposit money.

That's not to say it can't happen, but obvious things like painting and carpeting will either be covered by normal wear and tear and/or no remaining useful life, either way we get nothing. My PM does (at a minimum) yearly inspections (with photos) to address the remainder for my long term tenants.

I've pushed him a little a time or two to be a little more aggressive, but for the most part I aquiese and let him excercise his best judgement since he has been on the front lines a long time as a PM in CA.

I've used an excel spreadsheet for more than 20 years. It's been far more than adequate, rental properties at most require only very elementary software. I've keyed my excel spreadsheet to correlate with tax line/form reporting so preparing taxes at year end is an absolute breeze (plug and play). I'll assume you don't do have any payroll issues.

@Patti Robertson the Virginia resident agent is required for me because I will be a nonresident trustee, it's not for the trust.

It's apparently required by the local court that has jurisdiction even though the trust itself isn't directly subject to court supervision.

@Patti Robertson

It's definitely going to be a trust as I will be involved in its creation (providing some general limited input as to terms).

My question is that since I will very likely be a successor trustee at the date of trust establishment, and ultimately trustee at some point in the future, what do I need to do as a nonresident of Virginia.

From what I have read, I may need to appoint a Virginia resident to act as my legal agent to avoid having to post a bond. Just wondering if anyone has specifically had to deal with this issue?

I may be named a trustee for a Virginia trust that will have among other things real estate within it. Virginia has certain trustee requirements that a Non resident (out of state) trustee must satisfy, that a Virginia resident trustee does not.

Does anyone have any practical experience with these additional requirements (designation of agent, posting of bond, etc.)?

1) Rental real estate property income that qualifies for QBI should not be subject to self employment tax. 

2) The standard to be met is the conduct of a trade or business under IRC 162, not the active or material participation rules. It sounds like you should meet the trade or business standard, and whether you meet or do not meet other standardd is not directly relevant.

3) I'm in close to the same situation as you are, no losses and meet the IRC 162 trade or business standard.

4) The limitation calculation is fact specific, my income is over the 199A limits, but I'm not ultimately limited (i.e., I still get the full 20%). You need to assess your own fact pattern.

5) It can.