Posted by: todd
04/19/2004, 08:55:52
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I have been looking over some of your articles and thought that you may be the right person to ask a question that my partners and I have. Here is the situation. We have properties that we have bought in our corp and want to transfer them via a trust to our LP so that the Lp can then “owner finance” them to an end buyer. I say “owner finance” with quotes because we are setting it up in the trust so that our buyer has a residency agreement with a two year option to purchase. After two years we agree to owner finance them at pre-set terms. We are doing it like this because if we owner financed the properties from the start, we would have to pay taxes on the entire “gain” from the sale even though we do not realize it for 30 yrs. – Terrible tax law!! So, my wife, who is our CPA is thinking that moving the properties from the corp to the lp may need to be an arms link transaction. She mentioned that, since the corp is the general partner of the lp, we may be able to just contribute it to the lp from the corp. Also, moving forward, we need to set this process up in a systematic, correct way. What we are doing is buying properties with cash from our corp and or individual accounts and credit lines and then refinancing them in our personal names, putting long term mortgages on them. We then want to deed them to put them into a trust and assign all of the beneficial interest in the trust to our lp in order to hold long term. Do you see any problems with doing it this way?
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