All Forum Posts by: Richard Z.

I don't know east coast, but here in CA new construction we are on hook for 10 years, waterproof is one of those things I have to go with big shops. Or at least someone in business for 10-20 years already, they know what will happen in 10 years and will come back fix the leak if it happens.

 Yes that is what we are looking for. 

What if the partner C actually are husband and wife, both separately are members of the LLC? After partner A and B leaving, there are still husband and wife each owns part of LLC.

Thank you for your input. Why it has to be distribution, is it because the LLC has >50% partnership sales, so that the LLC has to liquidate for federal tax purpose, even the LLC is still holding one house? If that's the case, will the value of the house be the FMV?

Any way to structure the sale/buyout transaction to avoid the LLC liquidation?

We've had a meeting setup with a CPA in a week, would like to get educated and seek other opinions first before the meeting. Another reason is that we realized for complicated tax issues, each CPAs could have quite different opinions. :-)

@Christopher Smith

Thanks for the input. The LLC is pass through partnership with no debt.

I have a question regarding LLC partnership buyout tax implication. I'm making a simple LLC scenario for easy discussion.

The LLC has three partners A B C. LLC did real estate development project: it bought a land and built three houses. At end of project LLC sold two houses on the market , used proceeds of sales to buy out two partners A and B, and then kept last house in the LLC for partner C as primary residence. After buyout, C is the only owner of LLC, and last house is C's primary residence. Does C need pay any tax due to the buyout transaction?

Assume these are the numbers:

Land acquisition: 1.5 MM

Subdivision and construction of 3 houses: 1.5MM

Sales price each house 1.5MM x 2 = 3MM

Each partners invested: 1MM

Partner A,B each got 1.5M after the buyout (from sales proceeds 1.5Mx2=3MM)

Partner C kept the house.

Notes: Assume the LLC OA allows membership buyout and all partners agreed on the transactions.

The purpose is mainly for partner C to avoid tax at buyout, and then use house as primary residence to sell after two year.

Thanks in advance.

Justin M. I also feel your frustration, you might hire the wrong architect. The best way to hire the architect if to look at their portfolio. The work they can come up for you usually can tell in the portfolio.  If you don't like their portfolio most likely you will be disappointed down the road. Especially for architect been in the industry for 20+ years their portfolio will says it all.

Depend on market, if it's on MLS and most likely will be multiple offers, then seller won't even care how much it cost to fix. If it's off market sale and been on market for a while, then yes hire a contractor and give a formal estimate, seller might bite.

1940 it might be knob and tube electrical and plaster instead of drywall both will cost more to fix. If that's the case most likely you will end up doing gut down remodel.

Can you ask what's the cost difference to build a hotel comparing to condo/apartment? In terms of $/sqft. 

Go to similar subdivision, neighborhood, and price range see what other builders are offering. Start from there to see if you want to offer similar or better brand/model depend on your target sales price. Then go to the dealer or manufacturer sales rep to see what deals you can get. Some appliances have volume builder discount - I will contact them directly to see where they will direct you to.  Some products they have territory and strict pricing policy, but some dealers still able to work out something out creatively. 

Different price houses will use totally different materials/appliances. what's the price range are you targeting to sell?