The IRS wants to foreclose mom's house

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated) 

Yahoo!   Google   Windows Live   del.icio.us   digg   Netscape

Subject Author Date The IRS wants to foreclose mom's house porpora1686 08-26-2009  Re: The IRS wants to foreclose mom's house paultry 08-27-2009  Re: The IRS wants to foreclose mom's house HLunsford 08-27-2009  Re: The IRS wants to foreclose mom's house Phil Marti 08-27-2009   Re: The IRS wants to foreclose mom's house Steve Pope 08-27-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 08-27-2009   Re: The IRS wants to foreclose mom's house Steve Pope 08-27-2009  Re: The IRS wants to foreclose mom's house paultry 08-27-2009   Re: The IRS wants to foreclose mom's house Steve Pope 08-27-2009  Re: The IRS wants to foreclose mom's house paultry 08-27-2009  Re: The IRS wants to foreclose mom's house D. Stussy 08-28-2009  Re: The IRS wants to foreclose mom's house paultry 08-28-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 08-28-2009  Re: The IRS wants to foreclose mom's house D. Stussy 08-28-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 08-28-2009  Re: The IRS wants to foreclose mom's house Seth 08-29-2009  Re: The IRS wants to foreclose mom's house paultry 08-29-2009  Re: The IRS wants to foreclose mom's house Seth 08-30-2009  Re: The IRS wants to foreclose mom's house HLunsford 08-28-2009  Re: The IRS wants to foreclose mom's house D. Stussy 08-28-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 08-28-2009  Re: The IRS wants to foreclose mom's house Phil Marti 08-30-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 08-30-2009  Re: The IRS wants to foreclose mom's house paultry 08-30-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 08-31-2009  Re: The IRS wants to foreclose mom's house Seth 08-30-2009  Re: The IRS wants to foreclose mom's house paultry 08-30-2009  Re: The IRS wants to foreclose mom's house porpora1686 08-30-2009  Re: The IRS wants to foreclose mom's house Gene E. Utterback, EA, RF... 09-01-2009  Re: The IRS wants to foreclose mom's house Stuart A. Bronstein 09-01-2009  Re: The IRS wants to foreclose mom's house Gene E. Utterback, EA, RF... 09-10-2009
Posted by Seth on August 29, 2009, 3:39 pm Please log in for more thread options >D. Stussy wrote: > >> What fraudulent conveyance? Before the LLC, he had NO ownership interest - >> as it was your mother's house. Depending on what happened, your mother (or >> her estate) may have placed the house directly into the LLC (by will). > >If Mom's will and/or state law left an interest in property >to her tax delinquent son, the Government may argue that he >received a valid, transferable, devisee interest in the >property at the time of her death (see Drye V. United >States, >http://www.law.cornell.edu/supct/html/98-1101.ZS.html). If >he transferred that interest to the LLC or to anyone else >without addressing his tax liabilities, the IRS may claim a >conveyance to the detriment of creditors. Suppose instead, he sold it for FMV. That wouldn't be a fraudulent conveyance, right? So how is trading a 25% interest in the property for a 25% interest in an LLC that owns the property? He didn't remove any value. Seth -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by paultry on August 29, 2009, 5:04 pm Please log in for more thread options Seth wrote: > Suppose instead, he sold it for FMV. That wouldn't be a fraudulent > conveyance, right? So how is trading a 25% interest in the property > for a 25% interest in an LLC that owns the property? He didn't remove > any value. > > Seth > Not knowing all of the facts makes it difficult to analyze. Knowing the review process required to initiate a collection suit, I'm guessing that, in the OP's case, the legal minds at IRS and DOJ were satisfied that the elements of a fraudulent conveyance exist, else the suit would not have been filed. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Seth on August 30, 2009, 3:54 pm Please log in for more thread options >Seth wrote: > >> Suppose instead, he sold it for FMV. That wouldn't be a fraudulent >> conveyance, right? So how is trading a 25% interest in the property >> for a 25% interest in an LLC that owns the property? He didn't remove >> any value. > >Not knowing all of the facts makes it difficult to analyze. > Knowing the review process required to initiate a >collection suit, I'm guessing that, in the OP's case, the >legal minds at IRS and DOJ were satisfied that the elements >of a fraudulent conveyance exist, else the suit would not >have been filed. Note that there are 3 points, and the third one is "to foreclose upon [brother's] interest in the LLC". The suit looks sort of like the standard defense pleading "My client never borrowed it, it was already broken when he borrowed it, and it was in perfect shape when he returned it." Seth -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by HLunsford on August 28, 2009, 1:40 pm Please log in for more thread options D. Stussy wrote: >> Greetings all! My brother, two sisters, and I formed an LLC to >> administer the ownership of my mom's house when she died. Each of us >> is has a 25% partnership interest. The LLC was formed in 2005. Well, >> it turns out my brother has tax debts to the IRS dating back to 2002, >> and now the IRS wants to put mom's house on the auction block. >> >> We received a summons last week stating that the IRS has filed suit >> against the LLC. The suit has three counts: >> >> 1. To set aside the "fraudulent conveyance" of my brother's one-fourth >> interest in the LLC. > > What fraudulent conveyance? Before the LLC, he had NO ownership interest - > as it was your mother's house. Depending on what happened, your mother (or > her estate) may have placed the house directly into the LLC (by will). > (balance snipped for brevity) The siblings inherited the house the moment mom died. Although the OP did not say, I gather the LLC was formed afterwards, hence brother did indeed have an interest in the house. ChEAr$, Harlan Lunsford, EA n LA -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by D. Stussy on August 28, 2009, 5:01 pm Please log in for more thread options > D. Stussy wrote: > > > >> Greetings all! My brother, two sisters, and I formed an LLC to > >> administer the ownership of my mom's house when she died. Each of us > >> is has a 25% partnership interest. The LLC was formed in 2005. Well, > >> it turns out my brother has tax debts to the IRS dating back to 2002, > >> and now the IRS wants to put mom's house on the auction block. > >> > >> We received a summons last week stating that the IRS has filed suit > >> against the LLC. The suit has three counts: > >> > >> 1. To set aside the "fraudulent conveyance" of my brother's one-fourth > >> interest in the LLC. > > > > What fraudulent conveyance? Before the LLC, he had NO ownership interest - > > as it was your mother's house. Depending on what happened, your mother (or > > her estate) may have placed the house directly into the LLC (by will). > > > (balance snipped for brevity) > > The siblings inherited the house the moment mom died. Although the OP > did not say, I gather the LLC was formed afterwards, hence brother did > indeed have an interest in the house. I interpreted it as they formed the (partnership) LLC before death of the mother. The LLC directly caught the property upon distribution, not the individuals. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Amount of Mom's Assisted Living Expenses that are Tax Deductible January 6, 2009, 1:32 pm Can I use more than one IRA to buy a new house? May 2, 2009, 2:13 pm Was this house a gift? April 5, 2007, 2:27 am sold inherited house December 28, 2006, 12:26 am Ad Valorem Tax: What is the definition of a "House"? January 28, 2007, 5:54 pm 2004 house fire February 5, 2007, 8:02 pm Selling a house at a lose. February 10, 2007, 7:03 am House as a gift question May 25, 2007, 1:41 pm House payment tax and interest ded? July 2, 2007, 1:42 pm Buying a relative's house December 19, 2007, 12:58 pm