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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Best vesting choice... Posted by Ward-CA- on January 12, 2004 at 11:18 AM In Reply to: Vesting posted by Alfred - Trainee on January 11, 2004 at 12:03 AM : Hi Ward, : Would like to run something by you if I may. I have an offer in to buy a large 12.5 acre parcel that has 7 house sites on it. It is a gated community with some of the infrastructure already in place (underground electric, water and a main road). My plan would be to sell off 5 of the lots to pay off the note and then have 2 house sites free and clear for me to either sell, or build houses on and sell. : If my offer is accepted I'll have to act fast to create an entity to take ownership (I don't want to take possession of this in my own name). I know that I could create a title holding trust for this and that would give me anonymity but I need protection and tax advantage. What would be the simplest and fastest entity that I could set up for vesting, which would handle my two biggest concerns: : 1. : Limiting my liability and protecting myself as much as possible. : 2. : Paying out the least amount of taxes possible -- because I'll have major capital gains tax to pay when I sell the 2 lots (125K each = 250K) or build and sell. : Thanks for your time, : Alfred ============================== Alfred, 1. I like the format of a Limited Liability Co. (LLC) as a shield for limiting your personal liability. But it's not known for any favored tax treatment. 2. If you hold the property in your LLC for a year before you sell you'd qualify for long term capital gains tax treatment. Alternatively you could do a 1031 exchange rather than a simple sale and thus postpone any tax into the future. For more specific information for the layman on tax saving methods in real estate transactions I'd suggest two books: A. "Aggressive Tax Avoidance For Real Estate Investors - 17th Edition" by John T. Reed, MBA @ http://www.johntreed.com B. "The Real Estate Investor's Tax Guide - 4th Edition" by Vernon Hoven, CPA Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Hi Ward, : : Would like to run something by you if I may. I have an offer in to buy a large 12.5 acre parcel that has 7 house sites on it. It is a gated community with some of the infrastructure already in place (underground electric, water and a main road). My plan would be to sell off 5 of the lots to pay off the note and then have 2 house sites free and clear for me to either sell, or build houses on and sell. : : If my offer is accepted I'll have to act fast to create an entity to take ownership (I don't want to take possession of this in my own name). I know that I could create a title holding trust for this and that would give me anonymity but I need protection and tax advantage. What would be the simplest and fastest entity that I could set up for vesting, which would handle my two biggest concerns: : : 1. : : Limiting my liability and protecting myself as much as possible. : : 2. : : Paying out the least amount of taxes possible -- because I'll have major capital gains tax to pay when I sell the 2 lots (125K each = 250K) or build and sell. : : Thanks for your time, : : Alfred : ============================== : Alfred, : 1. I like the format of a Limited Liability Co. (LLC) as a shield for limiting your personal liability. But it's not known for any favored tax treatment. : 2. If you hold the property in your LLC for a year before you sell you'd qualify for long term capital gains tax treatment. : Alternatively you could do a 1031 exchange rather than a simple sale and thus postpone any tax into the future. : For more specific information for the layman on tax saving methods in real estate transactions I'd suggest two books: : A. "Aggressive Tax Avoidance For Real Estate Investors - 17th Edition" by John T. Reed, MBA @ http://www.johntreed.com : B. "The Real Estate Investor's Tax Guide - 4th Edition" by Vernon Hoven, CPA : : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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