All Forum Posts by: Jeremy L Riddle

@Tim Swierczek Thanks, that makes sense. I need to get someone to walk me through the scenario of the capital improvements part because (A: I'm a veterinarian in my day job, not an accountant and B:) we do not have enough annual income over PITI to cover more than about 20% of the improvements so we can't expense it from this year's revenue. And I really need to start seeing this business dole out regular and predictable profits instead of holding them forever. One owner draw in 9.5 yrs is ridiculous no matter what way you look at it, in my opinion.

@John Woodrich   Could I contact you (and if so, how would you prefer?) in regards to getting a quote on your fees and scope of service? (if you are even accepting any new clients at all, I know everyone is busy.)  

@Daniel Anshus  can that be done in a manner that keeps the funds out of the reported income (taxed money) for the year???  

@James Hamling  could you recommend a good CPA for real estate in Minnesota?

@Basit Siddiqi Could you expound on that a little bit, please? I realize those 2 scenarios are the same. In both cases we are using post tax dollars to do the improvements and then depreciate that over x number(???) of years, right? My understanding is that the money has been reported on the K1s as profit, we've paid taxes on it, and we should have taken owner draws. My understanding is also that loan proceeds are not taxed and therefore since we have only $11k in debt and almost $200k in equity we could afford to get a LOC or other low cost loan to finance the improvements and have a non taxable event with the little bit of interest being tax deductible. We could take our 18 months left and make it 3 yrs, still get the house paid off soon, AND finally get in the habit of getting paid in this 10 yr old business that has so far paid almost nothing. How would you go about getting a business owner to understand you need to get paid, and still be tax savvy? PS, Our account does suck, we just switched for that reason - no coaching - but I don't think this new one is going to be much better, and I want to know if my understanding of the tax ramifications is correct or not.

PS, yes I know we need to get an operating agreement and stated goals in writing and to operate by them going forward.  I'm mostly curious in ways I can explain to them how important actual cash flow is, figure out why they're OK with working for free (I'm sure they're not but we're not taking the money), etc.  Or if you all think I'm completely wrong and just paying down debt and holding (what I believe is) post tax money in the operating account is just peachy.  

Greetings! My wife and I have 2 Single Family Homes in an LLC with another couple. We've had it for 9 going on 10 years now and have taken an owner draw one time in the history of the company (maybe 2 times) for less than 3K total per couple. The rest of the $22+K profits are sitting in the LLC checking account. The renters are long timers - very good pay history, have been in the houses for 4 yrs and 7 yrs. Our business partners want to make some improvements to the house with the 7 yr tenants in it - it does need carpet, some minor mechanical improvements, etc pretty badly but they want to use money from the checking account to pay for it - the house is within 3 years of being paid off and has more than enough equity to cover it. My understanding is that the money in the account is our money that we've paid taxes on through the K1 statements that come each year. They don't seem to understand this and blank stare when I tell them I would like my money. How do I make them see that this money is half theirs, half ours, and not the LLC's money and that we should use equity to pay for the improvements? Or am I wrong? What would you guys do? I'm not willing to spend more of my money on a business/investment that is only building equity and no cash flow. I need advice. It seems to us that if equity is our goal then selling now at the top of the market would be wise. If profits, then we should be taking them.... Thoughts?