Re: Purchasing a rental with un taxable money. - Posted by John B. Corey Jr.
Posted by John B. Corey Jr. on July 14, 2005 at 18:47:30:
You are not clear where the money came from. What does it really mean when you say “partner have’s a lot of money but not showing up with the IRS?” Maybe I do not want to know.
Money is money. If you want to have your partner on the deal and they have the funds in a bank account there will not be an issue with the lender providing the loan. That lender only cares that the funds were liquid and there prior to the deal.
Now, lets assume you are implying that there is some sort of tax dodge going on. Lets also assume that you have posted to a public website so there will be evidence that lasts on a back up for years to come if the IRS ever wanted to check. They might not know to look but the evidence is there.
If you actively work with the partner to ‘hid’ or otherwise try to avoid the IRS you can be accused of money laundering or at least tax fraud.
If you partner with the person on a deal then do two things.
Take no specific action to actively help the partner hid the money. Stay out of that aspect. That is for the partner to deal with.
If there is a later action and the IRS wants to seize or otherwise lien assets your jointly owned property will be impacted. Use the right legal structure so you can control things when the event happens.
BTW - People might say that the IRS will never notice. The way they notice is when a person upsets someone else and they want revenge. Or when there is a divorce or something similar and the facts come into the light. The IRA pays 10% of what they collect to the person who provides the tip. Hence there is incentives including financial to disclose the issue.
Chelsea Private Equity LLC