All Forum Posts by: Mary Joe

Hi All

Just wonder if this is the norm for Miami.

I received a quote for renter's insurance with liability coverage of $300K and wind coverage, the quote is about $1100 for 1 year. Is this normal for Miami?

The agent told me there is only 1 carrier that does renter insurance in the area and I will get the same quote anywhere I go.

btw, it is a small 500 sq feet condo.

Just want to get the board's opinion before I sign up for this.

Thanks.

Hi All,

Can someone name the streets in Charlotte that have good street life or high walkability scores? ie: a neighborhood where residents can walk to shops, supermarkets, restaurants, entertainment etc. without driving.

Can you provide the street name and cross streets ?

I couldn't find any on my own. It seems that the city is very spread out and you do need a car pretty much anywhere you go , even for the Uptown (city center) area.

Any help would be appreciated.

Thank you!

Hi All, I finally have the property appraised.

Can someone tell me what is the next step to transfer the property from my C corp to myself? I want to learn about the process as much as possible before contacting an attorney.

I assume for my situation, a quit claim deed is all I need.

I came across this link, is the process really as straight forward as it sounds?

http://www.ehow.com/how_7486490_transfer-deed-property-florida.html

"File the quitclaim deed (properly notarized) with the Florida county property appraiser's or tax collector's office. Take the completed quitclaim deed to the county recorder's office or the property appraiser's office. Speak with a clerk about filing the quitclaim deed. Pay the filing fee and submit it to the clerk. The Florida quitclaim deed is recorded by the county clerk and the property is transferred from the grantor to the grantee.

Read more: http://www.ehow.com/how_7486490_transfer-deed-property-florida.html#ixzz2oGzNaFsq"

Are there any other steps I am missing to facilitate the ownership transfer?

The posters here and my accountant have explained the tax consequences to me already and my accountant will take care of the taxes both at the C corp level and on my 1040, so now I just need to make sure the actual transfer of the ownership is done correctly.

Any advice would be appreciated. Thanks in advance.

MJ

@Steven Hamilton II

@Bill Gulley THANK YOU so much guys, I always learn a lot here.

One more question if I may, is it risky to use "market value" based on government property tax assessment as opposed to hiring an appraisal?

@Bill Gulley

Oh wait, what happens when I have to sell the property one day? The LLC will record a gain, the gain will then flows back to the C corp, and the C corp will have to distribute that to me personally as dividends.

So we are back to square one?

I think if I transfer the property from the C corp to the LLC now, I can postpone paying tax on dividend for the time being, but eventually when the LLC sells the property, I will have to pay tax on the dividends anyway, probably more if the property appreciates in value.

@Bill Gulley

Thanks Bill. I am trying to understand how to record the transaction if I am to put the property into an LLC.

The LLC will be a separate entity that I will set up. So after transferring the property from the C corp to the LLC, my books will look like this?

LLC's books after the transfer, assuming fair market value $100K:

Asset (ie the property) = $100K
Capital contribution or Investment from C corp = $100K

C corp's books after the transfer will then show:

Property = $0
Investment in LLC = $100K?

Say if I am to rent out the property, then the net rental income will flow back to the C corp ?

I like the idea since this way the C corp will no longer have to distribute the property to me personally, and I no longer have to pay tax on the $100K dividend.

I wonder if IRS will challenge such a transaction or if there are any other tax consequences I am not aware of?

@Steven Hamilton II @Bill Gulley

Thanks for the feedback Bill. Long story why it was set up in a C corp, but I am glad it is being transferred out of the C corp now. The property is worth very little but I need to clean up the mess before it snowballs into something even worse.

Steven, I would assume the dividend would be treated as ORDINARY dividend subject to ordinary income tax rate, correct? I hope I don't need to worry about whether to classify the dividend as ORDINARY dividend vs QUALIFIED dividend.

Thanks !

@Steven Hamilton II

Thanks for the example, yes that's my understanding too about the tax consequences both at the C corp level and me personally.

Question about the dividend though. I got confused when you mentioned that the dividend to the shareholder "would mean a capital gain tax of $200,000". Wouldn't the shareholder pay dividend tax only? I wasn't told that there will be capital gain tax that the shareholder has to pay also upon receiving the dividend from the C corp.

I would assume any capital gain tax would be at the C corp level ONLY upon disposition of the property, since it is not a LLC, no capital gains would flow to the personal level.

@Steven Hamilton II

Correct, I never put any additional money into the C corp or took money out of the C corp. I can understand if I had put additional money into the C corp, then some or all of the transfer can be deemed to be a return of the additional money I loaned the C corp. But I don't understand what are the tax implications if I had taken money out of the C corp before.

@Steven Hamilton II The C corp was not formed purely to hold the property. It was formed to run other business activities. I did not loan the C corp any money. Earnings were accumulated (via other business activities carried on by the C corp) and the earnings or net profits of the C corp were used to fund the purchase of the property.