All Forum Posts by: Ryan O.

@Duncan Taylor

I realize I am on the hook for the income taxes generated from the s-corps income. Assuming I can pay the tax liability from other w-2 income or savings, why not do that and essentially defer the payroll taxes until I do decide to pull money from the business.

Seems like a no brainier to me, but I don't want to do anything illegal.

@Dan C.

I'm just to the south of you and have come across attics in furnaces from time to time, usually older houses that didn't have A/C originally

I had a flip a couple of years ago where a second story addition was started but never finished, our only real option was to put a second furnace in the attic.

The building code required us to put in a high efficiency furnace (no make up air allowed from the attic), and the furnace had to be in a drywalled and insulated room, with a solid core self closing door. Oh yea it needed a switched light and a hardwired fire/CO detector in the room. Since it was a high efficiency condensing furnace it needed to be in a secondary drain pan with a drain tied into the buildings plumbing.

@Duncan Taylor

In my case I have a business that is generating income that I don't need at this time, therefore I am not removing it from the business. Referring to IRS fact sheet 2008-25 my interpretation is I am not required to classify any of that income as salary as long as I don't distribute it. From FS 2008-25.

The instructions to the Form 1120S, U.S. Income Tax Return for an S Corporation, state

"Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation."

The amount of the compensation will never exceed the amount received by the shareholder either directly or indirectly. However, if cash or property or the right to receive cash and property did go theshareholder, a salary amount must be determined and the level of salary must be reasonable and appropriate.

@Douglas thanks for the reply, my question is do I have to take a salary if I don't take any money out of the business at all, no distributions, loans, property, nothing.

Even though the business my generate significant income.

I understand as a shareholder of an S-Corp you are supposed to pay yourself a reasonable salary for work performed on behalf of the business. You cannot pay distributions until you first pay yourself a salary.

But, what about if you don't take any money out of the business or you take very little out, and treat that as salary. I was reading IRS fact sheet 2008-25 and it would seem to me that the IRS cannot compel someone to take a salary. What do our resident tax gurus have to say about this?

@Will Barnard your 100-120 psf intrigues me. When you say standard bread and butter are we talking a simple box with vinyl siding colonial like this Standard Colonial or something with a little extra like this New Home.

The second example is a good example of what one local builder is doing, and if they are building for $115/ft they are cleaning up. I imagine the costs here, Chicago suburbs are pretty close to So Cal.

I agree with Bill Gulley

Personally I am a huge fan of CC for purchases, in addition to the documentation it gives you when using cash back or rewards cards its free money. If you are doing rehabs the rewards can add up quick.

@Account Closed My suggestion is to go spend some time on the Flyer Talk discussion board. The guys and gals over there have some pretty creative ways of doing just what you are after.

One of my favorites was the US Mint, (read the thread on flyer talk). You can't do this anymore but you used to be able to get cold hard cash in the form of dollar coins shipped from the US Mint paid for with a credit card with no fees, free shipping no less.

You would sign your name followed by "as member XXXXXXX, LLC"

Example:

Coach King as member King Properties, LLC

In my opinion Redfin is basically a subscription to the MLS without the advanced query functionality that the MLS offers. Redfin's data is updated in lock step with the MLS, my guess is the lag between the MLS and Redfin is only minutes if not less. Since I don't have MLS access I use Redfin daily for pulling comps, I also use the email blast functionality to get new listing information in my target areas.

The problem with Zillow and Trulia is people often use the estimated property valuations generated by their algorithms as an estimate of a particular properties actual value. As you know this is a mistake and should never be used as a substitute for pulling actual comps. Redfin allows you to pull actual comps, and is a very easy platform to use.