All Forum Posts by: Jon Rusnak

@Dmitriy Fomichenko

My wife and I had a baby at the end of the year so I haven’t had a chance to close my books just yet but I don’t think I’ll show profit for 2020. I was not able to devote as much time in 2020 as compared to years past so tax treatment isn’t as clear at the moment and I still need to research and document my position accordingly.

@Dmitriy Fomichenko

Thanks for your quick reply and for linking the article. I’ll definitely consider this but I have a feeling that my activity as a real estate agent may be viewed by the IRS as a hobby rather than a business. If I understand correctly, this would mean that I am not eligible for a solo 401k however my wife would be eligible so maybe we can take some action.

@Nathan Yee did you end up converting the 401k to a traditional IRA and then to a Roth IRA? I'm currently contemplating doing the same and was curious to see how this turned out for you.

@Enzo Pazos Make sure you're considering the withholding tax obligations (if any). The LLC will be viewed as a withholding agent and could be subject to liability if withholding tax liabilities are not paid timely.

@Isaiah Fariel

One thing I learned with the FHA is there are limits to the loans depending on the number of units. When I was looking for a triplex in Chicago we could not find anything below the FHA limit. What I wish I knew at the time was there are some lenders that will give you a conventional loan if you put a little bit more down. I've seen down payments on a conventional loan as low as 5%. Something I wish I explored / knew at the time!

@Jaki Gandara I’m in Palos Heights and would love to connect.

@Stipe Ba

I was actually discussing this exact question with my attorney and she informed me that transferring the property from your name to the LLC after you close on your loan (in your name) may give the lender the ability to call the full amount of the loan due if the title of the property transfers to the LLC. Keep us posted if you end up exploring this further.

@Eamonn McElroy thank you for the correction. You're absolutely right. 

@Linda Weygant we're talking about family here.  I'm sure dad is giving a good price.  Dad is probably paying his share of tax but everyone's situation is different and it was a suggested solution to not make the situation any more complicated.  

@Donald Brinkley

Is it a residential property (4 units or less)? If so, obtaining a loan through and LLC or partnership may push you under a commercial loan. Definitely run it by the lender.

With regard to the interest deduction you can likely achieve a desired results through open communication with your partner. If the 1099-INT is issued to your partner but the deduction will be split between the two of you then your partner would issue you a 1099-INT for your share. I've never done this in practice but I know it exists. Chat with your CPA to confirm.