What Are Tax Benefits For A Mort Lender
A friend of mine is interested in giving me a mortgage so that I may invest in a property. What tax benefits will he realize as the lender?
A friend of mine is interested in giving me a mortgage so that I may invest in a property. What tax benefits will he realize as the lender?
The benefit of knowing his income taxes are going to support the greatest nation in history. You on the other hand get to deduct the mortgage interest and taxes that you pay on the property, as well as take a depreciation deduction.
Related party rules do not apply to a property sale between you and your aunt. The rules do apply to your immediate family (to include half-brothers and half-sisters), your direct lineal ancestors (parents, grand-parents, etc.) and your direct lineal descendents (children, grandchildren, etc.).
WOW thats good news thanks for the reply
Quote:
On 2005-03-25 20:58, NewKidinTown2 wrote:
Related party rules do not apply to a property sale between you and your aunt. The rules do apply to your immediate family (to include half-brothers and half-sisters), your direct lineal ancestors (parents, grand-parents, etc.) and your direct lineal descendents (children, grandchildren, etc.).
The sale of the business within the S corp is separate from your stock sale and should be reflected on your K-1 and included on your return.
The basis of your stock in the S corp is your original purchase price + your share of all income of the corp since you bought the stock - all corp losses/deductions since you bought the stock - any cash or property distributions to you - any nondeductible expenses of the s corp. All of these items should be shown on your K-1s over the years.
The amount received for your shares less the basis up to the time of sale is your gain or loss on your sale of shares.
it doesnt allow me to edit the post....
I meant to say - does this mean, I would be taxed on 230-250K gain?
300-70K ?[ Edited by AptHunter on Date 02/17/2005 ]
If you are selling 5 properties and replacing them with three others, why not do a 1031 tax-deferred exchange to lower your tax liability, perhaps defer it completely ??
The tax rate on your sale profits will be your ordinary income tax rate since your holding period is less than one year. With a properly structured 1031 exchange, you can shelter a significant portion of your taxable gain.
NewKid - My understanding to do a 1031 is the property must be held for "investment puposes" and many people seem to believe that one year is a good time period.
Since he has owned his 5 units less than 1 year, are you suggesting that it is not necessary to hold for 1 year to do a 1031? How do you prove it was bought for investment?
Thank you.