Creating an llc for real estate investing

Pending Arizona Legislation – GPLET TransactionsHouse Bill 2213, which recently passed the Arizona House by a 50-9 margin, would impose a number of restrictions on Arizona’s GPLET program.  The GPLET statute was enacted in 1996, and allows a city (Phoenix and Tempe are the most frequent participants) to acquire ownership of land and improvements in a blighted area (which then becomes exempt from property taxes due to their governmental ownership) and lease them back to the developer at a significantly reduced “Government Property Lease Excise Tax” rate; the property typically qualifies for an eight-year tax abatement, followed by a reduced or abated tax obligation (which can extend up to 25 years in total under current law).  An estimated one-third of the largest buildings in downtown Phoenix have used GPLET leases.HB 2213 was introduced by State Representative Vince Leach due to a 2015 Auditor General’s report that found widespread … [Read more...] about 2016-2017 Arizona Case Law and Legislative Developments Affecting Commercial Real Estate and Lending

Canadians are still running to the US in hopes of yielding a higher rate of return by investing their hard earned money across the border. Many of these investments include US real estate, whether it is a multitude of rental properties, one for personal use by the family or simply for retirement. No matter what your reason for wanting to get involved in the US real estate market the same question is always asked, how should you hold title to this US property? Piecing Together all the Right Information Most Canadians will do a fair amount of research before jumping into the US market, or speak with professionals regarding their upcoming venture. However, the issue is finding the correct information that is applicable to your specific needs. The Internet is great, but let’s not fool ourselves into thinking that everything we read is correct. In fact, most of us understand that we need to be careful with what we find on the Internet, which is why we spend so much time finding … [Read more...] about Putting the Canadian-U.S. LLC (Limited Liability Company) Debate to Rest

The following information accompany a presentation Mike gave to members of the Arizona Commercial Mortgage Lenders Association (ACMLA) on March 8, 2016. A summary of legislative amendments enacted during the most recent session (the First Regular Session) of the 52nd Arizona Legislature that (to varying degrees) affect real estate and real estate lending. The general effective date of all legislation enacted during the session is July 3, 2015. The text of these amendments can be found on the Arizona Legislature's website (http://www.azleg.gov). Recent Arizona Case LawSteinberger v. McVey (AZ Court of Appeals 2014).  Perkins obtained a loan from IndyMac Bank to buy a house.  After Perkins died, his daughter inherited the home and tried to negotiate a loan modification.  She supposedly stopped paying because IndyMac advised her she needed to be in default for it to consider a note modification.  Following about a year’s worth of confusing communications … [Read more...] about Recent Arizona Case Law and Legislative Developments Affecting Real Estate Lending

This month the IRS issued proposed regulations designed to limit, or eliminate, popular estate tax planning transactions. Estate planners all over the country have used valuation discounts as a primary tool in managing the estate tax burden. A "valuation discount" is a technique used by transferors of closely-held businesses to reduce the value of a small percentage of their ownership interest (on a per share basis), which reduces the amount of the transfer subject to tax. The basic concept is that the sum of the parts of closely-held business ownership is not the same value as the entire business enterprise. Under these proposed regulations, family limited partnerships, corporations, LLCs and similar family business entities may be subject to estate and gift tax without the benefit of valuation discounts.These proposed regulations are designed to "close a tax loophole that certain taxpayers have long used to understate the fair market value of their assets for estate and gift … [Read more...] about IRS Targets Popular Estate Planning Technique

U.S. District Court Judge Tena Campbell’s ruling in Strong v. Cochran, 2017 U.S. Dist. LEXIS 170073, is a reminder that sometimes what you do matters more than what you say.  The case involved claims by the liquidating trustee for a failed real estate firm, Castle Arch Real Estate Investment Company, LLC, a California limited liability company (“CAREIC”).  The trustee sued the members of CAREIC for among other things, breach of fiduciary duty.  The members moved to dismiss that claim on the basis that “Amended Complaint does not allege the existence of a fiduciary duty, much less the breach of any such duty”.Judge Campbell rejected the the defendants’ motion with the following explanation (footnote omitted):California courts have applied such a “fiduciary duty in fact” concept. Under that approach, an individual, regardless of title, owes a fiduciary duty to a company when the individual … [Read more...] about Court Rules LLC Members May Be “Fiduciaries In Fact”