Deeding property to Corp. question - Posted by Miguel (CA)

Real Estate Investing
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Posted by Greg on February 26, 2002 at 22:06:46:

I have heard that the reason for putting the property under a corp. is because “IF” you do 5 or more fips a year, you are considered a dealer under the eyes of the IRS. I believe there are more tax benifits doing this as well. Anything under 5 should be OK under your personal tax’s. Please correct me if I’m wrong here. This is just what I have read.

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Deeding property to Corp. question - Posted by Miguel (CA)

Posted by Miguel (CA) on February 26, 2002 at 01:45:34:

I’m getting a loan on this very nice 3/2 but my lender won’t lend to my corporation yet (not two years old). He tells me to just get the loan in my name and then deed it to my corporation after the fact. No problem.

My question to everyone: what’s the best way to do this?

This deal is being done at a title company and I guess I’ll just tell them to treat this like a double close, where I’ll be “selling” the place instantly to the corporation. Do I need a purchase contract? Is this simply an S-2 deal, with the corp buying subject to my loan? If so, what about the 10% down I put on the property? If the corp doesn’t have enough cash to pay me the 10%(42K)now, do I just create a note for this amount?

Or should I just exchange the property for shares in the corp?

Oh, and I don’t care about any Due on Sale clause since I plan to flip the place right away.

Thanks in advance for all responses.

Miguel

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Re: Deeding property to Corp. question - Posted by Nate(DC)

Posted by Nate(DC) on February 26, 2002 at 14:28:23:

Just a question, if you plan to flip it right away, why do you care about putting it in a Corp. I can’t imagine you’d want to keep money in the corp. for tax reasons.

NT

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Re: Deeding property to Corp. question - Posted by Miguel (CA)

Posted by Miguel (CA) on February 26, 2002 at 21:41:33:

Nate,

I’m gonna claim ignorance on that one, though it is what my CPA told me to do. But I think there are tax issues involved, even for a quick flip, aren’t there? I’m curious now so i’ll be calling him about the matter later this week.

Thanks,
Miguel