Lonnie Deal and Tax Implications - Posted by Jon Darty

import · February 18, 2002, 2:04pm

Posted by Jon Darty on February 19, 2002 at 23:39:26:

Thanks for the help guys…I’ll be discussing this cash basis method with my tax attorney later this week…If I get any more useful info on the subject I’ll be sure to post it …

Thanks

Jon Darty

import · February 18, 2002, 2:04pm

Lonnie Deal and Tax Implications - Posted by Jon Darty

Posted by Jon Darty on February 18, 2002 at 15:04:01:

Ok, I’ve just finished both of Lonnies books and am about to start doing deals asap… My concern is on dealing with having to pay taxes on the full sale during the same year as trhe sale…I know you can get around this by structuting lease options or by renting, but every park I’ve looked at in the area strictly prohibits renters or leases of any kind.

Lets say I profit $15,000 total in one year including interest payments collected…In the 28% tax bracket I would end up paying $4200 in Taxes at the end of the year. Thats a lot of cash to come up with at one time considering Lonnie suggests you put all of your received payments back into new deals…

Is there any way to defer at least part of the Taxes or reduce them, or will i just have to save the cash to cover tax payments…I intend on talking this over with my tax attorney before tax time next year, but was hoping to hear how any of you have dealt with this…Feel free to be as detailed or technical as needed, I have degrees in both Finance and Economics so I have a excellent understanding of how things work, but I’m not an accountant…so…

Thanks in advance guys

Jon Darty

import · February 18, 2002, 5:12pm

The most important income tax posts … - Posted by Jerry Freeman

Posted by Jerry Freeman on February 18, 2002 at 18:12:17:

http://www.creonline.com/mobilehomes/wwwboard4/messages/4427.html This is the post Lucas mentions in this same string. It’s the original post in January, 2001 by John Hyre, Esq. about using the cash method and avoiding the artificial income tax hit from Lonnie deals.

http://www.creonline.com/mobilehomes/wwwboard4/messages/11280.html This post is a continuation of the same discussion, brought up to date as of December, 2001. It contains important additional information about when expenses for “supplies” (included the home itself) are counted for tax purposes, plus discussion of how the cash method tax strategy is working for people who’ve actually used it.

Best wishes,
Jerry

import · February 18, 2002, 4:35pm

Re: Lonnie Deal and Tax Implications - Posted by Lucas

Posted by Lucas on February 18, 2002 at 17:35:55:

You might be interested in a post John Hyre made a while back.

http://www.creonline.com/mobilehomes/wwwboard4/messages/4427.html

It explains how a mobile home dealer with less than $1 million in annual gross revenues could use the cash method of accounting to spread the tax hit out over the period of the note.

Perhaps that post will be of some assistance to you. I found it interesting, though I lack the knowledge required to properly understand all of the reasoning behind it or what the potential difficulties of it might be. It seems to be working for Mr. Hyre, though, so presumably it could be made to work for others.

Lucas