All Forum Posts by: Cameron Skinner

@David Zheng if you paid them your required to send them a 1099, it doesn't matter if proceeds came from a loan. If they are incorporated or an LLC filing as a corporation then you don't have to send them a 1099. In FL most contractors are S-Corps due to the worker comp rules so I don't have to send out too many 1099s but even if they are a Corp make sure you still get a signed w-9 from them because then you will have proof that you confirmed their filing status in box 3

Hope this helps good luck!

@Diane Kruse Always hire someone who is an expert in Real Estate, and preferably owns investment property themselves, and someone with some letters behind their name.  A good tax professional will always save you more in tax than you will ever pay in fees. I'm not taking on any new clients but if you private message me I can send you a referral.

The rule is if it "extends the useful life" then you are supposed to depreciate unless it falls under the safe harbor rules, if your just repairing something your usually fine, but if your replaceing an HVAC unit or putting a new roof on then you need to depreciate or claim safe harbor. So in your case I would suggest you need to depreciate insulation everything else you should be able to take as a current expense.

Hope this helps, good luck 

If you had no revenue, sales, advertised or solicited in the state I don't think your required to file. Just because you spent some money exploring opportunities in the state does not constitute business activity, so I think your fine, I agree with @Scott McCadden that I would set up an LLC in Texas if you do end up purchasing a property, or may want to explore using a land trust to hold th property which may avoid this issue all together, this has become popular in FL, but not sure if they work similar in TX.

Hope this helps good luck

@Scott McCadden is 100% correct if you did not have an appraisal in 2008 IRS allows you to use property tax valuations or comparable sales in 2008, you may be able to get much of this info on Zillow.com 

Hope this helps good 

@Andrew Nash, while you can do this, and it's a fix for this deal, Florida has really high "transfer" taxes so in the future if your going to purchase a property like this I would purchase it in my own name with a local community bank then do a cash out re-fi then you will only pay doc stamps and intangible tax on the new additional money, not the whole amount of the loan, you can also do an "update" on the tilte insurance policy since your not changing ownership, instead of a paying for a brand new policy.

Hope this helps,

Good luck 

Yeah unfortunately you can't set up a self directed solo 401k with this structure because you can't have any employees other than spouse, you could possibly each partner have his own LLC S-Corp that invest in the main one, but that's a question for Solo 401k experts.

Another strategy may be to rent your flip for at least a year and one day thus converting income to Long term capital gains.

Lastly hire a really good licensed tax professional, someone with some letters behind their name that specializes in real estate, and owns investment property themselves, and someone who will work with you on planning and strategy for your specific situation. 

Hope this helps Good luck!

Usually to post loan

                         Debit.            Credit 

loan                                      10,000

Closing cost         500

Checking.          9,500

Take Loan Money out

                             Debit.         Credit

Checking.                                  9,500

Owners Equity     9,500

Since the transactions only affects the balance sheet and not income statement, is why you don't have any taxable income.  Now @Brett Sorenson is correct that without seeing all your stuff this is a really basis answer, for example some Entity structures you can't have negative equity or it may effect your tax basis in your property.  You really need to talk to a good licensed tax professional someone with some letters behind their name.  They will always save you much more in tax than you will ever pay in fees.

I was about to answer but @Linda Weygant nailed it! 

@Dave Toelkes, yes your partly correct that's why I put the "*" and disclosure at bottom of my post, but it gets even more complicated than that because some of the non-community property states you can also treat a multi member LLC with only spouses, as owners, as a disregarded entity if they are structured property. Florida where I live is an equitable distribution state, but when the LLCs Organizational Documents have been set up properly IRS will allow you to treat as a Disrguarded Entity but it takes Legal Expertise that specializes in these type structures, and possibly an Advisory Opinion from IRS, again depending on the individuals State Law. Usually, over kill, unless you have a huge portfolio and are working on Asset protection and estate planning.

Hope this helps, Good Luck!