I just did this with our current home we've been living in for 4 years, Do I have to pay any capital gains tax? lease agreement is for 2 years at $4k a month. $500 of the monthly payment goes towards the purchase price of $600k for payments that are on time only. My home is currently valued at $585k. I've collected a $24,500 option fee. Do I have to pay any taxes when they exercise the option being that this is our primary home for atleast 4 years? I have two seperate agreements, a residential lease and the purchase option agreement. I took a $500 security deposit for the regular lease, and a $24,500 option fee for the purchase option agreement. Rental homes in my area are going between $3000 - $3500.
Navy Federal asks who is the Beneficial Owner during the application process for a Business bank account. How do you maintain anonymity while answering that question?
I have a question ⁉️ coach correct me if I'm wrong how I was taught is there's two different agreements on a lease opt you the "lease" which simply works as the rental portion without taking a security deposit or first month rent ect ect....then you have the "option agreement" which you receive the huge down payment and the terms of it is spelled out as far as price, deferred date in time, ect ect... Is the the correct way from a selling point of view?
how is it that the 20k option agreement dowpayment at the end of the video (14:20) is taxed deferred? what qualifies it as a "reinventment"? also is there a certain amount that the credit of $700 at 14:20 has to be? like minimum and maximum since it cant be the entire payment thats credited like the example before
The option is not considered income until it expires or is exercised. The tax treatment will depend on exercise versus expired. Expired is ordinary income while the other is capital gains.
Hey Clint, I've been getting into lease options with a few of my rentals in markets I don't want to be in for longer than 5 years. It's been a great way to boost profits and have a safe exit strategy before I 1031 exchange into a more expensive market. Can Anderson Business Advisors help write lease purchase contracts?
This video couldn’t be more relevant to me. This is our exact business model! We don’t have any of the monthly rent go towards the property value to avoid any issues with it looking like a sale. Do the option funds paid by the tenant have to be kept isolated in an account or can they be used by the business in the meantime since technically those funds are gone unless they purchase the home? I believe you mentioned at the end of the video they can be invested. Just wanted to make sure.
I hope this video helps everyone in their journey! Comment below on a topic I should cover next! ⬇
I can’t find a button to page to join on my add
Awesome information. Thanks Clint
I just did this with our current home we've been living in for 4 years, Do I have to pay any capital gains tax? lease agreement is for 2 years at $4k a month. $500 of the monthly payment goes towards the purchase price of $600k for payments that are on time only. My home is currently valued at $585k. I've collected a $24,500 option fee. Do I have to pay any taxes when they exercise the option being that this is our primary home for atleast 4 years? I have two seperate agreements, a residential lease and the purchase option agreement. I took a $500 security deposit for the regular lease, and a $24,500 option fee for the purchase option agreement. Rental homes in my area are going between $3000 - $3500.
Good afternoon coach!!
Navy Federal asks who is the Beneficial Owner during the application process for a Business bank account. How do you maintain anonymity while answering that question?
You cant get anonymity with a bank.
Damn that was scary
I have a question ⁉️ coach correct me if I'm wrong how I was taught is there's two different agreements on a lease opt you the "lease" which simply works as the rental portion without taking a security deposit or first month rent ect ect....then you have the "option agreement" which you receive the huge down payment and the terms of it is spelled out as far as price, deferred date in time, ect ect... Is the the correct way from a selling point of view?
Correct it is best to have 2 different agreements. Remember the option can not look like sale.
You're my HERO, future partners here in few weeks
Nice
how is it that the 20k option agreement dowpayment at the end of the video (14:20) is taxed deferred? what qualifies it as a "reinventment"? also is there a certain amount that the credit of $700 at 14:20 has to be? like minimum and maximum since it cant be the entire payment thats credited like the example before
The option is not considered income until it expires or is exercised. The tax treatment will depend on exercise versus expired. Expired is ordinary income while the other is capital gains.
Hey Clint, I've been getting into lease options with a few of my rentals in markets I don't want to be in for longer than 5 years. It's been a great way to boost profits and have a safe exit strategy before I 1031 exchange into a more expensive market. Can Anderson Business Advisors help write lease purchase contracts?
That is outside of our lane. You will want the assistance of a local attorney familiar with the laws and ordinances. Thanks for thinking of us.
Hey Clint do you have turnkey wholesale quads or singles for sale whose titles are clear and free?
Yes in Winston Salem NC but you must be part of our infinity investing program to gain access.
This video couldn’t be more relevant to me. This is our exact business model! We don’t have any of the monthly rent go towards the property value to avoid any issues with it looking like a sale. Do the option funds paid by the tenant have to be kept isolated in an account or can they be used by the business in the meantime since technically those funds are gone unless they purchase the home? I believe you mentioned at the end of the video they can be invested. Just wanted to make sure.
They do not have to be kept isolated.