All Forum Posts by: Christopher Smith

Too early to tell. Neither party really has the ability to fully control the agenda so both are going to need to accept some significant compromise positions, and where that will fall is at this point just a pure guessing game.

"Generally, unless you meet the qualifications to be considered a real estate professional, your rental income is passive and should be reported onto a Schedule E.

If you meet the qualifications to be considered a real estate professional, your rental income is not considered to be passive, and can be reported onto a Schedule C. On the Schedule C, you should report your rental income and any relating expenses or deductions."

FROM WHAT PUBLICATION DID THIS COME FROM? 

Probably not a good idea to address these issues through this forum as already noted, but if you do address your activities with a competent cross border practitioner you will want to add tax treaty analysis to your discussion. The current US/UK tax treaty provides significant relief on jurisdiction to tax and rates of tax issues, just as a starter. 

I assume your LLC's are disregarded entities? In any event, if you take a distribution of funds from the surplus LLC and then contribute those funds to the LLC needing them I see no problem with that. Having separate legal entities doesn't per se prevent you from making a distribution from one and a follow on contribution to another. Just properly document the movement of the funds.

Do you risk tax gain recognition when you move the property from the LLC S Corp to the LLC?

I prefer the Rube Goldberg special when structuring LLC entities. As I've always said you just can't have too many LLC's when you own a rental property.

California is going to make you pay every year for every LLC you establish. Not sure what kind or how many properties you are going to acquire, but CA will make you disclose on your tax return if you have an LLC, and how many, and each (regardless of where formed) is going to cost you for nothing other than the "privilege" the state will assert to make you pay for using an LLC. Not sure if this is just a revenue grab, or a punitive measure for those who attempt to do a liability end run. Likely its some of both.

Welcome to the golden bear state.

Ok thanks. Are there many REITs that currently regularly engage in this type of feeder based structuring for a investors? If so is there a typical investor profile?

Thanks @Joe Sera and @Dave Foster very helpful. 

A couple of follow up questions. 

1) After the 1031 exchange, and then after the follow on 721 contribution, I own an interest in a partnership held by the UPREIT. No tax so far I think.

2) If I convert that partnership interest into shares in a PUBLICLY traded UPREIT I trigger tax on the deemed sale/exchange of the partnership interest into stock of the REIT?

or

3) If I convert the partnership interest into a private UPREIT, then I trigger tax if/when I sell the Shares in the REIT?

just trying to figure out how this thing really works.

PS Dave. Picked up some Palantir on the dip below 20, better late than never? I guess we will see :)

Do we have anyone that has personal experience with a 1031 strategy that is sponsored by an UPREIT?