Which Is Better
I have a S corp and had a property in the companies name when I sold it. I had it for 4 years as a Lease Option house (rental). I sold it in Sept 07 for (lets use easy numbers) 135K I bought it for 85K with a 25K balloon note due so total purchase price was 110K. When I sold the property I gave credits for taxes (2K) and (4K) in closing costs. I have a net profit on the HUD for 29K not including the 2k for taxes or the 25K due to previous seller (promissory note).
I have over 3200 in receipts for cleaning, repairs, water heater, electric etc that was done to the house in 2007.
I want to know what will I have to pay taxes on (in your opinions as I understand to not take any advise here as final, talk to an accountant)...
Thank you
Seems like tax could be 0 if you did a 1031.
This is a hard question due to recaption of depreciation, but it seems that the tax would be roughly 15% of the 29000-3200 (I bet there are more receipts around)
When did you purchase the property? When you purchased, did you put the tenant boyer in place with a four year option?
I purchased it in Aug of 04 and put a tenant in it Jan of 05 with a 2.5 year lease option. There was a tenant in it when I bought it and after I raised their rent they moved that was why Jan 05 was the tenant I put in with the L/O
Quote:
On 2008-01-05 20:09, NewKidInTown3 wrote:
When did you purchase the property? When you purchased, did you put the tenant boyer in place with a four year option?
Thank you Chris, I did not know that and will intend on keeping property as rentals/long term investments from now on.
Very good information.
Thank you again.
If the husband has died, the surviving spouse has complete autonomy to do whatever she wants with HER estate.
hi newkid,
thanks for the reply. there may be some confusion. the husband has died. the surviving spouse, in this case the wife, will have complete autonomy over the survivor portion. however this is definitely not true of the irrevocable portion.
living trusts do not have to create a bypass trust (credit shelter trust or family trust - all the same thing). but if they do, the trust dictates the amount of control the wife has over the irrevocable portion. in a nutshell, about the max the wife can have is she gets all the income, and can use it for food, housing, and other basic needs.
but that is the most that the irs will allow her to have. more than that, and the assets are considered hers, and there is no bypass trust at all.
the trust itself allows the wife to place up to the exemption amount, if that is legal to do. i am trying to determine the legality of it.
the reason for a bypass trust comes in 3 basic flavors. first, it allows the deceased spouse some say-so about the beneficiaries of that portion. secondly, if the trust has the correct provisions in it, the assets are protected from the creditors of the wife, and thirdly, are never again subject to any possible estate tax.
so while the wife loses some control, she also gains a lot of protection.
thanks again for posting.