Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for January 20th, 2005

Posted by taxguru on January 20, 2005

Feds To Lotto Winner: Pay Up – In a sane world, where people are responsible for their actions, this wouldn’t even be debatable.  Someone who recently skipped out on $45,000 of debts should have no hesitation in making good on those debts from the $60 million lottery check he received.

 

Social Insecurity? – Thomas Sowell takes on the DemonRats’ asinine argument that there is no Social Security crisis.

 

It’s time to reform Social Security – George Will

 

You’re too stupid to manage your own money – The DemonRat philosophy in a nutshell.

 

Quiz: Are You Ready To Sell Your Own Home? – It’s not as easy as it often appears to be.

 

A Word to the Wise For Timeshare Buyers – I have no hesitation n proclaiming that buying timeshares at full retail price is the biggest rip-off in the real estate market.  It’s not such a bad deal, however, when you pay only $1,000 on the secondary market for an interest that someone else paid over $20,000 for.  Just don’t be the idiot paying the $20,000, regardless of what freebies the promoters give you.

 

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Can LLCs Own Primary Residences?

Posted by taxguru on January 20, 2005

Q:

Subject: primary residence held in LLC

Question:

If I have my primary residence placed in an LLC will there be any capital gains due when I sell it after living there 2 yrs or more??

 

A:

The tax free exclusion for gains from primary residence sales of up to $250,000 per person is only available for homes owned by individuals. 

Properties owned by other entities, such as corporations, partnerships and LLCs, are not eligible for any such tax free sale because only individuals (human beings) can have primary residences under the tax code. 

On the books of the other kinds of entities, the property is normally treated as an investment, business or rental property and the only way to defer taxation of any gain is via a 1031 like kind (aka Starker) exchange.

If you are serious about being involved with LLCs and real estate, you really should be working with a tax pro or you could easily find yourself owing a lot of unexpected taxes.

Good luck.

Kerry Kerstetter

 

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