first of all,
B,
i’m not talking about speaking to an accountant or attorney.
what i’m saying is when you talk about “using a land trust” and doing all these other fancy things is, IN MY OPINION, too much for the new investor to even consider.
don’t bog yourself down with all this technical stuff.
learn the BASICS of real estate investing. do an actual deal after you understand the BASICS of contracts, negotiating and the relationships between buyer, seller, broker, title company, appraiser, bank, etc…
simple.
keep it simple.
i’m NOT saying that what you’ve proposed is wrong or bad. i’m simply saying to simplify brother.
unless you have a good foundation in business and/or law - that stuff you’re proposing is over the top -
you want to create an LLC, that’s good. i recommend it. it’s a business entity - pass through.
if you want to elect S-Corp status - TALK TO YOUR ACCOUNTANT.
that may, MAY not be necessary and depending on your investment strategies, may not be your best option.
Dave -
that’s very nice of you to go out and do that homework. thanks for the clarification, however, if you’re going to survive in this business, you’ve got to realize ALL the advantages of business deductions and understanding the IRS and how they conduct themselves.
i’m NO EXPERT. and i’m not pretending or presuming to say that what you wrote is wrong in anyway.
i’m simply saying that the IRS has many rules and regulations that offer many advantages to businesses and investors.
if B bought a property, lived in it for a year and sold it, to me, the “intent” of B would not be crystal clear to the IRS out of the 200 million people that pay taxes. B’s intent could be explained in many different ways and would not necessarily fit the category set forth by the IRS.
if B’s intent was to live there, it’s perfectly reasonable to conclude that after that year, he just simply wanted to sell it for whatever reason he wanted to.
now you start purchasing things with LLC’s and doing this every year - well then, that obviously would impact intent and reasonability.
bottom line - consult a GOOD CPA and a REAL ESTATE ATTORNEY.