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How to pay an extra $20,000 to IRD each year, for no reason
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Hi Ross
Yes the link worked.
Very interesting so in your scenario isn’t it too late to change structure to get the $$ out of the LTD?
cheers
DonnaSEARCH PropertyTalk, About PropertyTalk
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Originally posted by donna View PostHi Ross
Yes the link worked.
Very interesting so in your scenario isn’t it too late to change structure to get the $$ out of the LTD?
cheers
Donna
Yes it is possible, but can be very difficult.
- Can't liquidate if still have other properties.
- could look at selling other properties to new entity, but that also has lots of catches, plus legal fees, plus brightline reset
- become an LTC later has implications too, plus can't become an LTC until 1/4 of next year. So still could be major interest and extra tax.
Generally accountants don't find out about the overdrawn current account until much later, so can easily be a year before it is found out.
Also many accountants don't deal with wind up issues well, so they sit around for a long time.
Overall a nightmare, so therefore expensive to resolve.
RossBook a free chat here
Ross Barnett - Property Accountant
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Thanks Ross - if your next webinar is on this topic add the link to it in this discussion.
cheers,
DonnaSEARCH PropertyTalk, About PropertyTalk
BusinessBlogs - the best business articles are found here
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Thanks for sharing Ross.
I've set up a LTC to manage my parent's rentals as their income wasn't equal (one retired one still working), now with both of them retired their income is pretty much the same, and I'm wondering what's the benefit of LTC now, maybe I should liquidate the LTC and transfer the title back to my parents....
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Originally posted by Chelsea View PostThanks for sharing Ross.
I've set up a LTC to manage my parent's rentals as their income wasn't equal (one retired one still working), now with both of them retired their income is pretty much the same, and I'm wondering what's the benefit of LTC now, maybe I should liquidate the LTC and transfer the title back to my parents....
It depends on the exact situation.
You may be able to rearrange shareholding to 50/50 - get full advice from a property accountant on this, as there can be catches like the share transfer being a taxable sale caught by brightline rules. And the Brightline restarting.
What is the legal costs to sell the property, what is the legal costs to buy the property back in your parents names? And brightline restart! What is the extra cost keeping the LTC? Maybe $45 annual company office return a year. Generally I would look to keep the LTC as much cheaper and easier, plus no brightline reset.
RossBook a free chat here
Ross Barnett - Property Accountant
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