Contract To Buy And Sell Real Estate (Land: Fill & Download for Free

Your question is obviously fake, but as a HYPOTHETICAL, there is a very interesting answer.Let me show you how to pay Zero Taxes on the $2M.If you “made $2M,” your after-tax cash available would be about $1,281,951.40.You mis-figured your tax liability, it would be $706,048.60.I gave you credit for the $12,000 Standard Deduction.But here’s what you can do to keep the entire $2M:1.) Create a single-member LLC.2.) File Form 8832 electing to be taxed as a corporation.3.) File Form 2553 choosing Subchapter S status.4.) Find a commercial shopping center selling for $6M.5.) Contribute $1,500,000 of the $2M to the LLC.6.) Use the $1,500,000 as a Down Payment (25%) and enter into a Contract for the LLC to buy the shopping center.7.) Before you close, do what is called a Cost Segregation Study.The Cost Segregation Study will be done by a firm of Accountants and Engineers who specialize in this. The Study will take the entire $6M price of the shopping center, subtract the land value, and break it down into two types of property.The main structures and some components will be Section 1250 Property, which will be depreciated over 39 years. This will comprise about 50–60% of the total price.Everything else will be classified as Section 1245 Property. This property has a shorter depreciable life, usually 5, 7, or 15 years. This will comprise about 40–50% of the total price.8.) Now you close on the shopping center and operate it until the end of the year.9.) When you file your S Corp tax return for the shopping center, let’s say it shows an operating profit of $700,000.Now, here’s the kicker.Under Section 168(k) of the new Tax Cuts And Jobs Act, you are entitled to claim 100% Bonus Depreciation on all of the assets with a depreciable life of less than 20 years that you placed in service during the tax year, both new and used assets.Your Cost Segregation Study identified these assets and placed a value of $2,700,000 on them.10.) You claim $2,700,000 in Bonus Depreciation and you will show a loss on your S Corp tax return of $2,000,000, which passes through to you as an individual taxpayer.11.) Since you have qualified as a Real Estate Professional (this is a hypothetical, so I assume you did that), this loss is considered a non-passive loss, and can be deducted from other non-passive income that you might have.12.) You deduct the $2M loss from the $2M income from your other activities, and you have no taxable income, and pay no taxes.Plus, you still have the $500,000 cash left from the original $2M, and the $700,000 operating income, less $50,000 for the Cost Segregation Study, and you have a shopping center valued at about $6.4M (by now), with Equity of about $2M.Ending up with $3.15M in cash and Equity, and a shopping center that is cash-flowing about $60,000 per month, is better than ending up with $1.3M and nothing.This is the world of Real Estate Investing.Why would anyone do anything else?Even though I think your question was a hoax, this answer is real.Good Luck.Michael Lantrip, Attorney | Accountant | Investorhttp://amazon.com/Michael-Lantrip/e/B01N2ZRGUY

Many people assume that they can simply 1) buy a house, 2) apply a fresh coat of paint, 3) trim some bushes, and then 4) resell the home at a profit. Unfortunately, this process, called "flipping," is not that easy. After all, if it were, everyone would be doing it.There are several skills and people that every potential investor/flipper should have in place before even considering entering into a real estate transaction of this nature. In this article we'll look at the top five must-haves you'll need to succeed.1. A Group of ExpertsWhile a house flipper can certainly go it alone, it will certainly help to retain individuals that are familiar with the legal, accounting and construction ramifications of flipping houses.Flippers typically work against the clock, so they must renovate a home on budget and then turn it around and sell it before the financing costs eat up their profits. In any case, a bevy of experts including a real estate agent, an attorney, a contractor or renovator, an accountant, a home inspector and an insurance agent can ensure that the work is completed in a timely and efficient manner.2. A Good Lay of the LandFlippers should know all about the area where they are buying property. They're on top of the features (acreage, number of rooms, type of home, etc.) that characterize, or are expected of, the most desirable properties in 'hood. Equally important is knowing what houses in the general vicinity have sold for and if there is likely to be any future development in the community (such as a new school, condominium or shopping center) as this could affect supply and demand.3. A Good EstimatorBy definition, house flippers attempt to buy a property and then resell it at a profit in relatively short order. In order to do this, however, the flipper must typically make some structural and/or cosmetic changes to make the property more appealing to the next buyer.If the flipper underestimates the costs associated with the refurbishment he or she may be exposed to large monetary losses. Therefore, a flipper should be familiar with construction materials (their use and their cost), as well as local construction codes, the cost of local labor and the time it should take to do a given job.This is no small feat. In fact, it takes even the most seasoned construction professional many years before he or she is aware of all the nuances that exist. In any case, before becoming involved in flipping, be certain of your abilities to estimate a job in terms of both cost and time.4. A Handyman or Knack for Home ImprovementThe house flippers that make the most money buying and selling homes tend to be handy people. That is, they have the ability to step in and lend a helping hand when time or money constraints kick in. Most flippers can do things like install a sink, change a countertop, do basic electrical or plumbing work, and/or shingle a roof.Why is being handy so important?The obvious answer is that if you can do the work yourself, you won't have to pay someone to come in and do it. However, there are other advantages to being handy as well. For example, there are times when it will be impossible to get an electrician to install an attic fan on short notice. There are also times when a job must be completed without warning at the last second in order to obtain a certificate of occupancy. In these instances, having the ability to navigate your way around a tool box is very valuable. And of course, the more first-hand knowledge you have of renovation projects, the better you'll be at estimating the amount of time and money they'll take.5. A Dose of PatienceOne of the biggest obstacles to making money in the real estate market is that buyers tend to overpay for a given property.Why do buyers overpay?Typically, buyers become emotionally attached to a property or develop some other bond with it, which in turn forces them to enter into a contract on less than favorable terms.However, savvy flippers have the ability to avoid emotional purchases. The eternal quest is to find diamonds in the rough and properties on the cheap, but a flipper knows if they can't buy a property at a favorable price and with favorable terms, it makes sense to simply move on.The bad news is that patience is a difficult virtue to teach, and hone. In general, either you have it or you'll lose a lot of money trying to learn it.Conclusively, if you aren't buying the home with cash, it's important to secure a mortgage with a highly favourable interest rate. You can research rates and terms easily, using online resources like mortgage calculators.

Real estate prices are really a function of an area's income/economy. Seattle is a mecca for techies, after all Microsoft is there and has created a lot of millionaires there. The "sticks, bricks, mortar and labor" are essentially similar in many other "cheaper" areas. Therefore, land, and the "what the market will bear" mentality becomes the basis for price.Real estate "listings" are really a unilateral contract; seller's do not have to SELL their property usually unless they enter a bilateral contract with a party to do so. I'm not an attorney, but mine explained it to me this way. See an attorney for legal advice.My son wants to buy a property in a town in Massachusetts where the AVERAGE list price to sale price is 103% of the listed price, some go for much higher. A recent property he was interested in had 22 offers. So in a "hot" market property gets bid higher and higher, until either the economics no longer make sense, meaning the income of the area no longer supports the mortgage multiples lenders require for buyers, since most buyers get mortgages, or the economy goes into a tailspin...and the real estate market is part of the economy. The direct impact may not be immediate, because real estate sales have a lag time as they are not liquid assets and the "marketing time" is usually several months and it takes awhile for the market to realize that properties are no long selling at premium prices, or no longer selling at appraised prices of even last year.I have friends in "tar sands" oil country. With the implosion of oil prices their house, which DID get sold, probably sold for 20% LESS than it would have just two years ago.Seattle looks good as long as the economy is strong and incomes are high enough to meet mortgage multiples to residential prices.