Every investor knows well the importance and value of owning a commercial real estate space. It could provide them a solid income specially when the commercial space is located in a very strategic location such as Sacramento region.
To provide you a better understanding, commercial investment is such a very lucrative business venture particularly when investors start leasing out properties to would be tenants that would like to rent commercial spaces for a long period of time.
Investing in commercial properties has the most imperative advantages and these are the reasons why most investors have shifted their way to buying commercial spaces. Investors can lease out commercial properties for approximately 10 to 15 years and during that span of time, they could receive a monthly profit from the space rentals.
But what are the crucial things to keep in mind when purchasing for commercial spaces in the region? To give you an idea about this, you may read some important commercial buying tips I have written below;
Don't forget to ask for the Deed of Absolute Sale (Contract of sale) When you buy any property, it is always good to ask for the contract of sale from the property seller. In layman's term, the deed of absolute sale is simply an agreement between the property buyer and the property seller. Basically, the function of this particular deed is to summarize the important details of the commercial real estate transaction.
Witten in the contract of sale is the location of the property that is being sold, the name of the property buyer, the name of the seller, total value of the property being sold, the size of the property, other terms and conditions that both parties had agreed on and lastly, the date where the property title will be given to the property buyer. This Deed of Absolute sale is a solid contract that could prove the legality of the property being purchased.
Don't forget to ask for the transfer of property title to your name When you have paid at least 80 percent of the total value of the property, you can already request the property seller to prepare the transfer of the title under your name. But make sure to present the Deed of Absolute Sale and the payment receipts to have a smooth sailing transfer of title.
Showing posts with label Property. Show all posts
Showing posts with label Property. Show all posts
Tuesday, October 30, 2012
Wednesday, June 6, 2012
Farm Property, Trusts & Llc: Preserving Ohio Family Farms For Future Generations
Placing farm property in a trust-owned limited liability company (LLC) is often a key component of protecting a family farm against estate tax laws, creditors, law suits, nursing homes and other risks so it can continue to be enjoyed by future generations. Specifically, the LLC holding your farm property must be owned by an irrevocable trust.
If you're a farmer in Ohio, undoubtedly you've worked hard for the success of that farm and you want that hard work to benefit your family for many generations to come. Unfortunately, state and federal estate tax laws, debt obligations, nursing homes and other factors can put your farm at risk upon your death if proper succession planning is not in place.
While proper succession planning consists of many parts, an important part is often to create an irrevocable trust to own the LLC holding your Ohio or Dayton real estate. A lawyer can help you with this by drawing up the necessary legal documents that form the irrevocable trust, designate the beneficiaries, and describe what is to happen to the property and LLC upon your death.
Property in a Trust-Owned Limited Liability Company is Protected Against Most Debts and Lawsuits; Estate Taxes can be Minimized
By placing your farm property in a trust-owned LLC, the property becomes owned by the LLC, which is a legal entity just like a corporation, rather than being owned by you. Since you don't own it any more, the property is protected from many forms of debt and lawsuits. The irrevocable trust that owns the LLC adds another layer of protection and ensures that the LLC and property it holds is passed on to your chosen beneficiaries.
To more fully protect your Ohio or Dayton real estate, a lawyer with expertise in estate planning and business law can draft legal documents to create limited liability corporations, insurance trusts and other entities that work together to protect your farming business and personal assets for inheritance by your family.
Farm property in a trust-owned LLC can also avoid estate taxes. Estate tax law usually takes effect when property transfers to the beneficiaries. However, the legal documents for your irrevocable trust can specify that your beneficiaries can make use of the property while ownership is retained by the irrevocable trust and the LLC. Since the property is never transferred to the beneficiaries, estate tax laws never come into play.
Placing property in a trust-owned limited liability company is just one tool used to minimize estate taxes and other risks to your Ohio or Dayton real estate. A lawyer knowledgeable in succession planning and estate planning can show you additional ways to help you prepare a complete succession plan for your farm.
If you're a farmer in Ohio, undoubtedly you've worked hard for the success of that farm and you want that hard work to benefit your family for many generations to come. Unfortunately, state and federal estate tax laws, debt obligations, nursing homes and other factors can put your farm at risk upon your death if proper succession planning is not in place.
While proper succession planning consists of many parts, an important part is often to create an irrevocable trust to own the LLC holding your Ohio or Dayton real estate. A lawyer can help you with this by drawing up the necessary legal documents that form the irrevocable trust, designate the beneficiaries, and describe what is to happen to the property and LLC upon your death.
Property in a Trust-Owned Limited Liability Company is Protected Against Most Debts and Lawsuits; Estate Taxes can be Minimized
By placing your farm property in a trust-owned LLC, the property becomes owned by the LLC, which is a legal entity just like a corporation, rather than being owned by you. Since you don't own it any more, the property is protected from many forms of debt and lawsuits. The irrevocable trust that owns the LLC adds another layer of protection and ensures that the LLC and property it holds is passed on to your chosen beneficiaries.
To more fully protect your Ohio or Dayton real estate, a lawyer with expertise in estate planning and business law can draft legal documents to create limited liability corporations, insurance trusts and other entities that work together to protect your farming business and personal assets for inheritance by your family.
Farm property in a trust-owned LLC can also avoid estate taxes. Estate tax law usually takes effect when property transfers to the beneficiaries. However, the legal documents for your irrevocable trust can specify that your beneficiaries can make use of the property while ownership is retained by the irrevocable trust and the LLC. Since the property is never transferred to the beneficiaries, estate tax laws never come into play.
Placing property in a trust-owned limited liability company is just one tool used to minimize estate taxes and other risks to your Ohio or Dayton real estate. A lawyer knowledgeable in succession planning and estate planning can show you additional ways to help you prepare a complete succession plan for your farm.
Friday, May 4, 2012
Ordinary Income v. Capital Gains on Selling Foreclosed Property
Ordinary Income v. Capital Gains on Selling Foreclosed Property
WENDELL V. AND SHARON T. GARRISON v. COMMISSIONER
U.S. TAX COURT
December 1, 2010
Facts: Wendell Garrison, in the years under question, 1998 to 2000, was a Mortgage Broker making about ,000 a year from his mortgage business. Also during this time period he and his wife bought and sold foreclosed properties, flipping them as quickly as possible, holding them for a period averaging about four months. The Garrisons reported the income from the properties as capital gains rather than ordinary income. The IRS claimed that the properties were not bought as longer-term investments, but were merely inventory in the ongoing business of buying and quickly reselling foreclosed houses. The IRS sent a notice of deficiency stating that since this was ordinary income, self-employment taxes were also due against the earnings. The Garrisons appealed the ruling to the Tax Court
Analysis and Conclusion: Prior Court rulings have outlined the criteria for whether the buying and selling of property should be considered capital gains or ordinary income (see box below). Since the Court saw the Garrisons as buying and selling homes on an ongoing basis, rather than investing in them for the longer term, the Court considered their activities to be a Schedule C business earning ordinary business income. Therefore, they had to pay employment taxes on their selfemployment income. The ruling was in favor of the IRS.
Notes: This is a particularly timely case with the vast amount of foreclosures currently on the market. No doubt, if one of your clients dabbles in the business of buying and selling foreclosed properties, they need to understand that their activities can be considered a side business earning ordinary income.
Source: National Society of Tax Professionals: Federal Tax Alert, December 2010
WENDELL V. AND SHARON T. GARRISON v. COMMISSIONER
U.S. TAX COURT
December 1, 2010
Facts: Wendell Garrison, in the years under question, 1998 to 2000, was a Mortgage Broker making about ,000 a year from his mortgage business. Also during this time period he and his wife bought and sold foreclosed properties, flipping them as quickly as possible, holding them for a period averaging about four months. The Garrisons reported the income from the properties as capital gains rather than ordinary income. The IRS claimed that the properties were not bought as longer-term investments, but were merely inventory in the ongoing business of buying and quickly reselling foreclosed houses. The IRS sent a notice of deficiency stating that since this was ordinary income, self-employment taxes were also due against the earnings. The Garrisons appealed the ruling to the Tax Court
Analysis and Conclusion: Prior Court rulings have outlined the criteria for whether the buying and selling of property should be considered capital gains or ordinary income (see box below). Since the Court saw the Garrisons as buying and selling homes on an ongoing basis, rather than investing in them for the longer term, the Court considered their activities to be a Schedule C business earning ordinary business income. Therefore, they had to pay employment taxes on their selfemployment income. The ruling was in favor of the IRS.
Notes: This is a particularly timely case with the vast amount of foreclosures currently on the market. No doubt, if one of your clients dabbles in the business of buying and selling foreclosed properties, they need to understand that their activities can be considered a side business earning ordinary income.
Source: National Society of Tax Professionals: Federal Tax Alert, December 2010
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