Protecting Myself From Taxes - Posted by Brett

Posted by HOuserookie on December 22, 2000 at 07:44:01:

Thank you.

I do love this board. lolol

I have an ecommerce biz that requires me to do customer service regularly. So CREonline is just a click away.

Houserookie

Protecting Myself From Taxes - Posted by Brett

Posted by Brett on December 22, 2000 at 24:27:34:

First I want to say I think this site is great. Second…I’m looking for advice on a few things. I’m a beginning investor and would like to hear advice on saving myself from paying unnecessary taxes. And do you think I’m in a position where I should incorporate? One last thing… I’m worried about my family if something should happen to me or my investments. What happens to them?
I’ve got a couple of deals in the works for the next year. Around next fall I should have plenty of money for repairs, etc. I plan on getting into the investing a lot harder around next fall. I’ll probably only be doing 2-3 houses per year for the first year or two and progressing each year as I go. I’ll mainly be reselling but I might pick up a rental or two as I go.
How do investors keep from paying so much tax at sale if they don’t live in the property for 2 yrs? Also how can I find out for sure how much I will owe in taxes on profitable gains?
Also I’m getting ready to buy a rental now and will soon refinance and later sell (long story). We’ll probably sign contracts next week. Is there anything I can do now to protect myself on taxes, etc. later? Thanks in advance for any and all responses. -Brett

Re: Protecting Myself From Taxes - Posted by BillW

Posted by BillW on December 22, 2000 at 06:23:57:

Brett,
What uou will need is:

  1. Good accountant who is familiar with real estate deals and knows how to minimize taxes.
  2. Accountant can also advise you on incorporating. Eah situation is unique and all factors need to be taken into consideration.
  3. Family protection= insurance. Get a policy big enough to cover all money owed as well as enough to supply family with operating capital.
  4. Tax strategy for less than 2 year ownership = Talk to accountant. Probably doing 1031 exchanges to delay taxes will help, but think about this- when we finally go, is it better to leave behind almost nothing or is it better to leave behind millions of dollars in property to generate cashflows for our families? Yes, they may have a tax problem, (Gee, dad passed away and now I owe millions of dollars tax on all these properties because they are worth so much.) We should all be so lucky.
    Perhaps also, your family may want to participate in this business and investment project. If so, train them in how to do deals and set up the deals correctly and they will never suffer or need anything again.
    Good luck…BillW.

Re: Protecting Myself From Taxes - Posted by Houserookie

Posted by Houserookie on December 22, 2000 at 06:37:17:

My goal every year is to pay more income tax than the year before, while minimizing my tax bracket.

At the same time, I have no desire to work for the sake of making more money. 30,000 kids die of starvation each day.

However, I must say that I disagree with the mass in that I don’t need to leave the family with millions and millions to pay tax on.

I expect all my children to be smart enough to use what I leave them to produce more.

I don’t want to leave this world leaving excess amount of material objects.

When I was 22 years old, I threw away a half million bucks in the stock market. I was so busy trying to make money that I lost touch of what is important to me. Family, the then wonderful girlfreind, sports, and a healthy lifestyle.

The question is, “How much money does one need?”

Houserookie

Old Joke - Posted by Bud Branstetter

Posted by Bud Branstetter on December 23, 2000 at 21:22:15:

There is the old joke about how to become a millionaire in Real Estate- Start with two million.

I have no argument with the comment “no desire to work for the sake of making more money” or “I don’t need to leave the family with millions and millions to pay tax on.” It is not the same to say that I don’t want to leave millions that they don’t have to pay tax on. Or it’s not the same as saying I enjoy what I do and enjoy being paid for doing it.

The “How much money does one need?” is subjective. Is the answer the same for you as it is for Alex Rodriquez? Wealthy people give away billions to foundations and charities but it doesn’t effect their lifestyle. What lifestyle is appropriate for your heirs? Maybe they should make it on their own?

You’re Only 23? LOL (nt) - Posted by wayne (MD)

Posted by wayne (MD) on December 22, 2000 at 07:18:54:

nt

Re: 26 to be exact… LOL (nt) - Posted by HOuserookie

Posted by HOuserookie on December 22, 2000 at 07:25:23:

I have always been one of those young pups that believe it’s best to be broke before 30, and live 30-60 broke.

Then Pay Attention To This! - Posted by wayne (MD)

Posted by wayne (MD) on December 22, 2000 at 07:33:16:

I won’t go into my qualifications for making this statement here, but there are very few truly successful persons who have not gone bk or nearly so at least once before the age of 30. The difference between the failures and the successes is one simple act: The successful ones got up and started all over again. You seem to be one of those destined for success, unless, of course, all you do is spend your time on this board! Good luck!