How Does Living
In Community
Property States Make You More
Money In Investment Property?
Here
is a
list of community property
states that have specific community property laws that give you marital
rights
that you need to know; I have listed them below for your convenience:
· Arizona
· California
· Idaho
· Louisiana
· Nevada
· New
Mexico
· Texas
· Washington
· Wisconsin
Now
that
we have an understanding
let me get on with it. In the USA you have 50 inter-independent states
that are
largely autonomous but follow the guidelines of the supreme-court and
the
federal court in Washington.
The
main
tax body in the USA is the
IRS and they get paid when
you get paid. Never try to evade
your taxes,
you will be found out and as I have recently learned from asking a
consultant
at my tax body in South Africa (SARS) the tax man has the right to
charge you
interest of 10% PER DAY
on unpaid late fees.
If
you
think 10% is not so bad, try
adding $100 bill on the first late day to $1000 bill and then adding
$110 the
next day and $120 the next day…Just because you were late
with
paying your
taxes. Do Not Mess with Your Taxes unless you want to spend your life
paying
serious debt, interest and penalties.
The IRS published a document listing the community property states in America and you will find it by going to http://www.irs.ustreas.gov/pub/irs-pdf/p555.pdf
Now
that
I have scared the daylights
out of you I would like you to contact a local lawyer and CPA and get
them on
your payroll so that they can keep you out of jail. After you get their
advice
and paid for it go to your local tax offices and sit with the
government tax
employee and ask them thousands of questions based on your situation
and plans
to become rich. Be nice, act a little blonde and you will be surprised
how
helpful they are when you show that you want to give them more money
and you
have obtained good legal and accounting advisors.
Let’s
look at the benefit of living
in one of the above states.
If
you
are married in community of property
that is without signing a pre-nuptial (commonly called pre-nup) then
the laws
of the listed states say that:
1) Your
marital property rights allow
you to reduce your tax liability by submitting a joint return with your
spouse.
2) If
file
separate returns you have to include your half of
the combined income by your spouse. That is, take your full combined
income and
divide it by half. Your partner needs to be honest with their income or
you
will be liable.
3) Death
of
the spouse or death estate
laws will practically cause your estate and theirs to be audited.
My
recommendation is rather be married with pre-nuptial and no accrual
after you
marry because this separates your estates completely and incase of
bankruptcy
or death the other partner can go on.
If
you are married in community of property and are looking for ways to
create a
separate tax return for your real estate investments you can still buy
your
property under a limited liability company and a property or investment
trust
which both you and your wife can be trustees, shareholders and
beneficiaries.
Financing investment properties will be more complicated and will
require your
team to be very good and awake to make the process as painless as
possible.
Now
make no mistake this route is the way to go and will save you from
litigation
from your own private estate. Do not take short cuts with community and
you
will be rich forever.
