All Forum Posts by: Tim Tierney

Hi, Thank you for everyone's input!  Well, my wife won't be too thrilled with the advice (she wants a new house lol), but I appreciate it very much!  I don't see any reasons for paying off that 90k note immediately if there's no tax benefit.  The note is a 4% apr so holding onto it for a few more years wouldn't be a terrible move. 

I am in the process of building a team around me (i.e. accountants, attorneys, etc.) and am meeting with both in a couple weeks to put a plan together for 2016.  I appreciate the offer James, but I prefer to do business face to face with these team members so my first goal is to draw from my own pond and then venture out if the pickings become too slim.  

The other investments/tax shelters mentioned sound interesting, and scary at the same time since i know nothing about them but I will bring them up in my meetings and take it from there. 

Thanks again!  

Hello-

I am 35 years old, married with two small children (4 and 3). I'm in year 2 of my business (not real estate related), and am projecting to NET over 1 million dollars this year, pre-tax. My plan is to first and foremost use this positive cash flow to scale my business so I can maintain this rate of growth, or at least try too! However, even with an aggressive growth plan in place, I'll still have appx. $500k which will appear on my tax return as income unless I come up with some forward thinking ideas now in order to minimize the tax burden which will come as a result.

So I'd like to accomplish 3 things here:

1) minimize my tax burden for 2016
2) start investing in rental properties
3) make my wife happy with the purchase of a new home for our family

My wife and I own one home; our current residence which we bought for $160k. We still owe $90k on the note. One goal I have is to become a real estate investor. If we purchased a second, more expensive home, made it our primary residence, and then begin renting out the first home. Could I then pay off that 90k note before the end of 2016, and claim it as a deductible business expense? Would it be wise to create a LLC for my real estate company before I do this, and make my wife the majority owner so I can get the same tax benefits as I would get with Biz #3?

Thinking out loud now... Until I add more properties to my portfolio, I'm sure I'd be operating at a loss after all expenses so I guess keeping myself as the majority owner (or not even creating a legal entity for now) would benefit us more in the long run since those losses could lower my income for Biz #1 and Biz #2. Does this sound like a realistic and more importantly logical plan, or I do sound as ignorant as I feel?

Thank you for reading! I gratefully welcome all feedback, especially the criticism, so please do not hold back if you see holes in my plan, or my head!

Sincerely,

tim