I saw someone do this but want to understand potentially why. Person A bought a home from a sheriff sale using an LLC for $380k. Then they sell the home to a person owning the LLC for $160k, and then transfer it to a partner, so Person A and Person B for $1. The home is now up for sale for $1.2MM after they fixed it up. Just super curious why they would go from LLC to private ownership.
Probably because they don’t understand tax law and think this will help them save money.
Money laundering via real estate.
It’s just a scheme to circumvent property taxes. They’ll get caught eventually because people know about it.
Ollie said:
It’s just a scheme to circumvent property taxes. They’ll get caught eventually because people know about it.
But how does it benefit them?
It shows as a loss on their tax returns. But they’re not doing the right thing, and this one’s likely to get caught.
It really doesn’t benefit them unless their goal is the ‘cross bar hotel.’