All Forum Posts by: Daniel Johnson

We are having our monthly evening meetup at Fiddlin' Fish Brewing Company in Downtown Winston Salem on Thursday, 2/23/23. We will meet at 7 PM and have an open conversation about investing in real estate. If you are new to the group, we typically sit inside, in the back/middle. I will be there wearing a black and white "MACK" hat. Look forward to seeing you there next week!

Hey @Taylor Michels -

You are definitely looking for a unicorn. A wealth manager/advisor that isn't paid based on assets under management are difficult to find. Add on top of that a local preference, makes it even harder. I hope I might be able to provide a few resources that might help. First, when looking for a fiduciary private wealth advisor, you should start by focusing your search on fee-only advisors. The starting point for this in my opinion is NAPFA. Everyone in NAPFA are fiduciaries, but many will charge based on AUM. Next is XYPN, all of these companies are fee-only, but many provide non-AUM options. Lastly is a referral website for flat-fee advisors, on Tenon financial's website. All of these sites provide great resources for people searching for fee-only advisors, but going a step further towards providing advice around all assets can be a little more difficult. If I can provide any additional insight/help, please don't hesitate to reach out.

Hey all-

Come out and chat over coffee with other real estate investors. We meet at Sayso Coffee in Winston Salem at 6:30 am. We hang out as long as everyone wants. Hope to see you there!

Was great to meet you Jason! Awesome to hear what you have been up to. You are welcome anytime!

Quote from @Rashid Khalil:

Quote from @Daniel Johnson:

Quote from @Bryan Martin:

Quote from @Rashid Khalil:

I earned 90 k as a 1099 contractor working in my LLC. expenses are around 20 k so NOI is 70k. it appears tax efficient if I tax this income as S- corporation. i do have EIN for my LLC and all income and expenses were through LLC named bank account. my issue is I didn't use any payroll throughout the year to pay myself, so does it disqualify me for S- corporation tax option?

will appreciate thoughts / advises / guidance etc.

TIA

For an S-Corp, you’re expected to take a “reasonable” salary or wage for the work that you’re doing.  Easiest thing to do is probably start taking a paycheck in 2023 and be a S-Corp moving forward and don’t worry about it for the prior year.

I would talk with your tax professional. It’s not clear whether you have taken an S-election for the LLC or not. If you have not, then you need to adjust that first with the IRS, then sort out doing an annual payroll for the reasonable salary each year. The rest would flow through as ordinary income. 

thanks, Daniel, appreciate your advice.

 that mean can't fix this issue for 2022 ?

I would defer to a tax pro on whether you can file a retroactive S-election and fix not taking payroll last year. However, I’m going to say that 2022 is probably out the window at this point. However, you can begin working on 2023 right now. 

Quote from @Bryan Martin:

Quote from @Rashid Khalil:

I earned 90 k as a 1099 contractor working in my LLC. expenses are around 20 k so NOI is 70k. it appears tax efficient if I tax this income as S- corporation. i do have EIN for my LLC and all income and expenses were through LLC named bank account. my issue is I didn't use any payroll throughout the year to pay myself, so does it disqualify me for S- corporation tax option?

will appreciate thoughts / advises / guidance etc.

TIA

For an S-Corp, you’re expected to take a “reasonable” salary or wage for the work that you’re doing.  Easiest thing to do is probably start taking a paycheck in 2023 and be a S-Corp moving forward and don’t worry about it for the prior year.

I would talk with your tax professional. It’s not clear whether you have taken an S-election for the LLC or not. If you have not, then you need to adjust that first with the IRS, then sort out doing an annual payroll for the reasonable salary each year. The rest would flow through as ordinary income. 

Look forward to having you!

We are having our monthly evening meetup at Fiddlin' Fish Brewing Company in Downtown Winston Salem on Thursday, 1/26/23. We will meet at 7 PM and have an open conversation about investing in real estate. If you are new to the group, we typically sit inside, in the back/middle. I will be there wearing a black and white "MACK" hat. Look forward to seeing you there next week!

Do you know if the loan is backed by either Fannie Mae or Freddie Mac? You can lookup here: https://www.knowyouroptions.co... and https://myhome.freddiemac.com/...

If the loans are backed by either of these, you may need to reference their servicing guides to explain to Chase that they are required to allow you to transfer the property to an LLC per the terms of the respective servicing guide. You can find Fannie Mae's here: https://servicing-guide.fannie... and Freddie Mac’s : https://guide.freddiemac.com/a...

It actually looks like Freddie Mac requires you to have the loan for 12 months prior to requesting transfer, so you might just have to wait out that time period before requesting. 

Hope this helps. 

I would recommend you speak with Ashley Tison with OZPros. He is an attorney, but also prepares tax returns and helps with compliance for OZ funds.