All Forum Posts by: Mary Roberts

Thank you Mr. Hinrichs, here's the statement from the judge in the Byram case, a key case on this issue:

"If a client asks you in any but an extreme case whether, in your opinion, his sale will result in capital gain, your answer should probably be, `I don't know, and no one else in town can tell you.'"

That's why I'm confused and looking for what really is happening out there, and from your considerable experience, in real-life transactions, it sounds like when you buy raw land, do minimal improvement, and sell after one year or more, you've always been properly considered an investor, and have thus received long term cap gains treatment. 

Does this also hold when you sell on contract after one year? Sure appreciate your advice.

Thanks Mr. Acharya, by land investor I mean buying raw land, doing zero or small improvement such as dragging in a road and/or fencing, maybe a well, but not building a house. Then after one year or more, selling the land on contract for monthly payments.

If classified as a dealer, I would get no long term capital gain, and I would have to pay tax on the entire contract value in the tax year rather than on the amount actually received each year.

A vital tax question is whether you are classified as an investor or a dealer. If you have to be a dealer, it is a tax disaster.

I've learned a great deal from Mark Podolsky and thelandgeek.com guys. A fine bunch of people. But I have not been able to get the answer to this question:  

Are the land investors you know able to keep their investor status, or are they forced to be dealers?

If you are a dealer, land investing is no longer a good passive income system.

Now I have studied everything there is out there and have consulted with an excellent CPAa. I am not looking for a useless "check with your CPA" answer. 

Some of the guys at thelandgeek.com do hundreds of transactions per year. Are they having zero problems keeping tax status as investors?

What are you seeing in the real world? 

This is a vital question and we all need the answer.

I'm concerned that these guys have some kind of co-marketing tie-in with Rich Dad Poor Dad. I do not believe that Rich Dad Poor Dad offers valid systematic advice. It seems to me that the landgeek guys are upselling more and more, which will make them indistinguishable from fraudulent sellers of flipping strategies.

I usually am able to wait long enough for the transaction to be cap gains.