Posted by Lee on December 28, 2010 at 21:37:12:
What if he was about to declare bankruptcy and didn’t want the
bankruptcy trustee to inquire about the income.
If beneficiary of the land trust is a single member LLC would this be
fraud? How about if it was a multiple-member LLC and you owned
less than 50% of the LLC?
Hiding Rental Real Estate - Posted by Clemuel
Posted by Clemuel on September 17, 2010 at 17:51:42:
I have several rental properties which net a loss on my Schedule E. I am seeking a way to hide ownership from my 1040 tax form. No, I don’t mind paying my share of taxes, but I would like anyone examining my 1040 not to know that I own these houses.
I’m quite familiar with land trusts, but as Grantor Trusts, the income usually flows through to the Beneficiary’s tax forms. What would be the implication of the Trust filing a 1041 and keeping the financials off the Beneficiary’s forms?
Or what if a Corporation owned the places or was the beneficiary and only dividends showed on my taxes?
Any suggestions or recommendations would be appreciated.
Thanks much.
Clemuel, New York
Back to basics here - Posted by John Merchant
Posted by John Merchant on December 29, 2010 at 11:59:16:
Your thinking seems a trifle off-center to me as with trust, corp or LLC having title, what you’d properly or legally declare would be your ownership of those entities, either whole or partial.
Be advised that ANY concealment or hiding of any asset on any required govt form or sworn document is probably a felony, state and/or federal and it’d be the rare lawyer who’d ever permit, counsel or advise a client or advisee to do such.
When I was just out of law school I got a good example of basic difference in thinking of average lawyer vs. average physician, and while it’s risky and unfair probably to so generalize, here’s a lesson I got then and which I’ve seen repeated umpteen times since:
When faced with any question he/she doesn’t want to answer head-on, the Dr. is more likely to outright lie or mis-state the facts, whereas the lawyer, being scared silly of outright lie on a legal form (because of his/her awareness of possible legal and criminal consequences of course)that lawyer will either leave the form blank or dodge the question w/o committing outright perjury.*
Not to say the lawyer is any more virtuous than the Doc but is just more aware of ugly consequences of discovered perjury.
I watched a lawyer friend convicted of a Fed MISDEMEANOR for failure to file income taxes for several years, just ignoring them…and simultaneously watched a Dr buddy get indicted and then convicted of a Fed FELONY for his outright lies on his 1040.
Whereas my lawyer buddy got his wrists slapped by the tough Fed Judge for his “forgetting to file”, he didn’t even lose his law license and served no incarceration time.
The Dr in question was convicted of a Fed felony for his having committed perjury and served some Fed prison time, lost his license, etc.
I’d guess, in a similar vein (pun intended 
that the Doc is much more aware of the danger of infection than the lawyer, and the ugly possible consequences of ignoring good antiseptic practices. Whereas the careful doc, seeing the consequences of unprotected and infected lesions, is going to do everything he can to sanitize and disinfect, the average lawyer would likely just wash his blood off, or wipe it off with tissue and thus invite infection.
*Remember Bill Clinton’s infamous " What does IS mean?"?
Re: Hiding Rental Real Estate - Posted by Jack
Posted by Jack on September 17, 2010 at 22:08:40:
Since they are a net loss, I would assume that you have loans on them, and that the loans are in your name. So, assuming you could conceal ownership with a trust (I have not the slightest idea if you could), how would you account for the loans on your personal income tax return?
Re: Hiding Rental Real Estate - Posted by Clemuel
Posted by Clemuel on September 18, 2010 at 09:08:59:
The loans are presently part of the Schedule E profit-and-loss calculation which yields a net loss. I’m not concerned with them as they would always offset the profits of the properties, in whatever entity and on whatever form was reporting them.
Re: Hiding Rental Real Estate - Posted by Jack
Posted by Jack on September 21, 2010 at 23:44:21:
One of us isn’t understanding this, and it very well might be me, but anyway… You get a 1098 at the end of the year from the mortgage company, that 1098 is in your name and has your social security number on it (and if it is a big bank it often has the address of the property on it, but maybe yours do not). Unless you transfer them to an entity with a separate tax ID number, you have to list a description the properties on the schedule E. You could put some ambiguous description (maybe that is the easy way to accomplish your goal) I suppose, but I don’t see how transferring into a Trust helps you unless the Trust files a separate return.
Re: Hiding Rental Real Estate - Posted by Rick, the Probate Guy
Posted by Rick, the Probate Guy on September 20, 2010 at 18:27:40:
Why don’t you spell out your big concern?
I have rentals held in trust, loan are in former owner’s names, etc.
We (CPA) just files them along with other Sched E props. Nothing that complicated, per se. Are you concerned that someone close to you (spouse, et al) might pick up the address?
Could you change the nature of the asset by recording a TD or similar devise, and show income coming from a Note? Yeah, you’d miss certain write-offs but you could control what others see better.