Posted by William Bronchick on October 23, 2001 at 18:19:14:
In Reply to: HERE ARE THE FACTS...MILHOUSE posted by Bill Gatten on October 23, 2001 at 17:34:39:
Boy, where do you find the time to write SO MUCH?
Anyway, the pertitent issue to this discussion is the tax issue I raised. Although the transfer of a beneficial interest IS personal property under CA law (and most states), the Internal Revenue Code calls it a sale of real property. You know the Revenue Ruling, you have cited it yourself. The IRS considers a land trust a non-trust, meaning the beneficial interest is REAL property for federal income tax purposes. Herego, the assignment of a beneficial interest is an assignment of real property. Herego, an assignment of a beneficial interest means the seller NO LONGER OWNS IT, AND CAN NO LONGER CLAIM DEPRECIATION OR LATER CLAIM A 1031.
If I could convince you to back off on ONE issue, this would be it, Bill. Telling people they can defer gains on property already sold is a dangerous idea!
What really scares me (and should scare you) is if the IRS reams one of your sellers, it will audit all of your files and audit everyone. I can see the newspaper headlines now, "LAND TRUST SCAM RESULTS IN SEVERE TAX PENALTIES". Now I'll be wasting my time explaining how land trusts AREN'T ILLEGAL, just like I have to explain to all the dummies how flipping isn't illegal.
Maybe we should submit the facts for a Private Letter Ruling?
- Its a big city out there Joe (V V) Bill Gatten 14:30:40 10/24/01 (2)
- Re: Its a big city out there Joe (V V) Bronchick 18:14:01 10/24/01 (1)
- Re: big city Bill Gatten 13:46:33 10/25/01 (0)
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