Client had 6 Real estate sale transactions during 2014. He established Land Trusts for each of the properties in which he was Trustee and Beneficiary. My research so far indicates several advantages:
1) Privacy of ownership- under a land trust arrangement, the identity of the legal owner of the real estate is not disclosed to the public or any 3rd party.
2) Ease of transferability- the beneficiary (or owner) of a land trust may be changed without recording a change in the public records.
3) Avoids probabte- a land trust arrangement allows you to designate succession of ownership exactly as you wish, thereby avoiding probate & costly time consuming proceedings relating to the property.
4) Facilitates multiple ownership- a land trust can be structured to provide for a clear & easy legal direction where there are multiple owners of a parcel of real estate.
5) Retention of certain tax advantages- you are still eligible for the homeowner's land & senior citizen's real estate tax exemptions.
Tax Question-In 5 of the 6 real estate transactions, I have a buy HUD ONE & a sell HUD ONE for the same day. On his tax return, I was going to enter these on Form 4797 subject to a less than one year holding pattern, which of course will trigger ordinary income tax on the gains. The one property that he didn't buy/sell in the same day was purchased in Aug 14 & sold in Dec 14 which places this transaction in with the other 5. Would you agree? ______________
#2- No Fed ID obtained; TP SSN is used as the transferor on Form 1099S; Should these real estate transaction be reported on Schedule C?______
Thanks for your help,
Taxadvisor VA
1) Privacy of ownership- under a land trust arrangement, the identity of the legal owner of the real estate is not disclosed to the public or any 3rd party.
2) Ease of transferability- the beneficiary (or owner) of a land trust may be changed without recording a change in the public records.
3) Avoids probabte- a land trust arrangement allows you to designate succession of ownership exactly as you wish, thereby avoiding probate & costly time consuming proceedings relating to the property.
4) Facilitates multiple ownership- a land trust can be structured to provide for a clear & easy legal direction where there are multiple owners of a parcel of real estate.
5) Retention of certain tax advantages- you are still eligible for the homeowner's land & senior citizen's real estate tax exemptions.
Tax Question-In 5 of the 6 real estate transactions, I have a buy HUD ONE & a sell HUD ONE for the same day. On his tax return, I was going to enter these on Form 4797 subject to a less than one year holding pattern, which of course will trigger ordinary income tax on the gains. The one property that he didn't buy/sell in the same day was purchased in Aug 14 & sold in Dec 14 which places this transaction in with the other 5. Would you agree? ______________
#2- No Fed ID obtained; TP SSN is used as the transferor on Form 1099S; Should these real estate transaction be reported on Schedule C?______
Thanks for your help,
Taxadvisor VA