All Forum Posts by: Sheldon Harding

Greg,
I noticed your topic and didn't think you got an answer on this year's taxes. It would be like you had a partnership for those 2 rental properties. All income and expenses should be split evenly, but it is possible that one will have additional expense that the other does not share in and then that person would deduct that themselves. It would likely be better if the properties are kept to form an LLC as these can be flexible but keep your agreeements clear like Jon explains. Hope that helps you move your numbers onward and upward. I can help from a distance if you want. You can PM me if you want me to start e-mailing you directly. Sheldon

I just had some additional thoughts. If he sold it, he no doubt would owe some capital gains taxes. The ways to minimize that are an exchange or installment sale, which I mention in the first post. He might be able to exchange it for something that can generate more income for him.

I had time to check this website today. The gift exclusion is $13k for 2009. Amounts above that he needs to file a gift tax return that just indicate that he is using up some of his lifetime exclusion. Tax is due only if the $1million lifetime maximum is exceeded. But if he has a larger estate he should be seeking advice on how best to minimize taxes and doing it in $13k chunks to each person is one way. For instance, he could sell it to you with a note receivable and gift up to $13k per year to you to lower the balance due. Using this approach, you could end up owing his estate upon his premature death. The estate tax law is likely to change this year, so we have to stay on our toes and watch developments.

I just checked my tax news source and see nothing new. The IRS at this link still states that the last day to close is November 30: http://www.irs.gov/newsroom/article/0,,id=213375,00.html
The link helps with some other explanations.

If you have an original closing date set for November 30 that gets delayed, it might be worth pursuing a credit, but the date of sale is public record, so you would need to put some explanation with the return and it would be anything but a sure thing of getting the credit.

I see your delimma with the fix ups, but there is little you can do about that until they qualify for the closing.