Real Estate Inheritance
Transcript:
Jack Butala: Jack and Jill here.
Jill DeWit: Hello.
Jack Butala: Welcome to the Jack Jill Show, entertaining real estate investment talk. I'm Jack Butala.
Jill DeWit: And I'm Jill DeWit, broadcasting from sunny southern California.
Jack Butala: Today, Jill and I talk about real estate inheritance. Like it or not, if are a real estate investor or an aspiring real estate investor, get comfortable with the fact that you're going to buy real estate from deceased people and deceased people's heirs. It's just how it works.
Jill DeWit: It's the coolest thing as an heir by the way, I think, to find out that there's these assets sitting around and it happens all the time. You know, you joke about, it's like finding $5,000 in your coat pocket.
Jack Butala: Yeah.
Jill DeWit: That's what it is to these people. It's the coolest thing, you know and it's such a ... It's so common, I think especially rural vacant land. There's so many people I think out there that own property, bought property, like they were going to do their dream cabin. It's very common, it was something they planned on doing and then they never did. It's paid for and just sitting there.
Jack Butala: Right.
Jill DeWit: And they've quietly been paying the taxes for years and years and years, knowing that well, it's going to go to the kids. You and I even look at things like right now, we're no where near, you know, this point in our lives, but we're looking at assets now because we're not 20 and we have kids.
Jack Butala: Mm-hmm (affirmative).
Jill DeWit: We're actually looking at some of our assets as we take them on going you know what this would be good to have for the kids.
Jack Butala: Yeah.
Jill DeWit: Fortunately, we know the right way to set it up for the kids, so the kids know how to work with it, and I know this what we're going to cover, part of it in this show today.
Jack Butala: Exactly, we'll cover it all.
Jill DeWit: Thank you.
Jack Butala: We'll just call this the Jack and Jill Mythbuster episode-
Jill DeWit: I like that.
Jack Butala: There's lots of myths about wills and estates and all of it and trusts.
Jill DeWit: Cool.
Jack Butala: Before we get into that though, let's take a questions posted by one of our members on the jackjill.com online community, it's free.
Jill DeWit: Okay, Mike M. asks, "Hi All. My current business structure is a DBA for my land business."
Jack Butala: Doing business as.
Jill DeWit: "Of an underlying LLC, all in retail." Right. "When purchasing property, what name should I put on the deed? My own? The DBA? Or the LLC?" This is a good question. "What are the tax implications on each? I'm about to close on the sale of my first property and a property of my second, the first for this year, and I want to get things off on the right foot tax-wise. Thanks in advance, Mike."
Jack Butala: Good question, Mike, so there are certain legal entities that can own real estate, own real property. You as an individual can own real property, a trust can own real property, an LLC can own real property, so there's only certain entities that can own real property. There's a few other ones, but those are the major ones. A DBA is just a "doing business as" kind of hey, state of x, I'm doing business as this,