FMV of notes? - Posted by ChetO (NC)

Posted by Karl (Oh) on August 12, 2002 at 21:18:07:

I’ll add 1% to my figures this next tax year!

Karl

FMV of notes? - Posted by ChetO (NC)

Posted by ChetO (NC) on August 11, 2002 at 12:19:43:

Does anyone have a guess or estimate of the fair market value of a Lonnie Deal note? I’ve looked around a bit without success. Any suggestions on where to look? I need to know for tax purposes. I’m using the cash method of accounting and am booking the notes at FMV in the year of sale (Thanks to John Hyre for the tip).
Chet

Re: FMV of notes? - Posted by ChetO (NC)

Posted by ChetO (NC) on August 13, 2002 at 11:56:04:

Thanks for all the responses. This bookkeeping is a b%$#@. Anybody have an Excel spreadsheet that will automate booking a loan payment when using the cash method of accounting and booking the notes at FMV? It’s not too much trouble now with the dozen notes I have but I can see it taking a loooong time as my biz grows.

Re: FMV of notes? - Posted by JHyre in Ohio

Posted by JHyre in Ohio on August 12, 2002 at 18:12:48:

I currently use 45% of face for 1982 & older (i.e.- junk) and 54% for 1983 & newer. I don’t like round numbers, they attract too much attention.

John Hyre

Re: FMV of notes? - Posted by Karl (Oh)

Posted by Karl (Oh) on August 12, 2002 at 16:05:12:

Lonnie posted awhile back that he never paid more than 50% for a MH note. 50% is a nice round number. Good enough for me.

Karl Kleiner

Re: FMV of notes? - Posted by Steve Case

Posted by Steve Case on August 12, 2002 at 14:12:21:

The FMV of the note is going to depend upon several factors: Down payment, buyer’s credit score, FMV of home and note seasoning are the major items.

I discussed this same topic with John Hyre and decided that 60-70% of the face value is a good “rough” estimate of FMV of the note. John didn’t seem to have any problems with that number.

Remember that we are talking about a figure for tax purposes. The only time it would be tested is if you were audited and had to produce proof concerning the FMV. It would be very easy to do that here on this forum. I am sure that you could get at least 3 offers from some of the MH buyers on this site for just about whatever price you wanted them at. (Whether or not they would buy, is a different story…LOL) As long as they were documented and shown to be valid offers, they should work for IRS purposes.

I hope this helps.

Steve

Re: FMV of notes? - Posted by Steve Case

Posted by Steve Case on August 12, 2002 at 14:04:32:

The FMV of the note is going to depend on several factors: Owner’s credit, seasoning, LTV, amount of down payment, and age of MH being the major factors. If you are trying to establish a FMV for the note, I don’t see any problem using anywhere between 60-70% of face value.

I have discussed this same topic with John Hyre and he didn’t have any problem with the value assessment. The only problem you would have anyway with this is if the IRS decided to audit and you had to produce proof of the market value.

I hope this helps.

Steve

Re: FMV of notes? - Posted by Lyal

Posted by Lyal on August 12, 2002 at 12:15:15:

Chet,
How about listing your note on one of the note web sites and see what kind of quote you get?
All the best, Lyal