[WSBARP] Pass through sale structure

[Craig Gourley]

I don't know of any way you can avoid letting the LLP know without doing a
double closing.  We have had this question several times before and we
refuse to do the closing if there is no disclosure.  I think you have
excise issues in addition to the federal tax issues the Seller is going to
incur.  How would your 1099 read?   We suggest that the middle guy charge
an assignment fee to the Buyer which is disclosed on the HUD.  Our policy
for escrow is disclose the fee or do a double closing and pay the double
excise.   

 

Gourley | Hembree

1002 Tenth Street/PO Box 1091

Snohomish, WA 98291

(360) 568-5065 (phone) (800) 291-8401

(360) 568-8092 (fax)

Craig at 1031exchange.net

  _____  

From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Andrew Hay
Sent: Tuesday, May 13, 2014 10:11 AM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Pass through sale structure

 

Hello Wise Ones 

 

Here is a tricky one for me.  My client has arranged a double closing on a
set of 10 rental units (nothing in writing yet).  He has the seller
committed to selling at $45K given price per unit.  He then has a group of
investors set to form an LLP and buy the 10 units.  The LLP has agreed to
pay $50K per unit.  We are trying to figure out options to run this
through as one closing with the $50K markup (10 units times $5K per unit)
going to my client.  The seller doesn’t really want to change the list
price per unit to $50K because it will increase his gain.  My client
doesn’t want the $50K going out to him for the markup to appear on the
purchase documents for the LLP purchase.   Can this sale be structured to
meet the needs of the client?

 

 

Andrew Hay

Hay & Swann PLLC

201 South 34th Street

Tacoma, WA  98418

Phone: (253) 272-2400

Fax:     (253) 267-8947

 <http://www.washingtonlaw.net/> www.washingtonlaw.net

 

 

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author and do not necessarily have the endorsement of the Washington State
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