TX TX - Alan White, 55, seen leaving LA Fitness, found deceased, Dallas, 22 Oct 2020 #4

[annpats]

The code is such that if you've lived in the home 2 of past 5 years as primary residence....

So, you have to live in the home for 5 years minimum to qualify for the 0% income tax on the house flip?

Hmmm, that rules out making a fast buck.... 5 years is a long time.

 

[itsrak]

So, you have to live in the home for 5 years minimum to qualify for the 0% income tax on the house flip?

Hmmm, that rules out making a fast buck.... 5 years is a long time.

You have to have lived in home 2 of the past 5 years to get the cap gains break. So you can conceivable get tax break every 2 years flipping primary residences.

ex: you buy house A on 1/1/2015. On 1/1/2017 you rent it out for three years, and buy and move to house B to fix up. On 1/1/2020, you sell house A. Since you lived in it at least 2 of the past 5 years, any capital gain up to $250k is tax free for a single, $500k for a couple.

 

[brm1960]

You have to have lived in home 2 of the past 5 years to get the cap gains break. So you can conceivable get tax break every 2 years flipping primary residences.

ex: you buy house A on 1/1/2015. On 1/1/2017 you rent it out for three years, and buy and move to house B to fix up. On 1/1/2020, you sell house A. Since you lived in it at least 2 of the past 5 years, any capital gain up to $250k is tax free for a single, $500k for a couple.

Gain related to the rental period is generally taxable.

 

[Altklug]

Gain related to the rental period is generally taxable.

You can live in a rental property for 2 years and avoid taxes! But you must own the house for 5 years!

 

[diggndeeperstill]

It is common for folks to live in houses they flip for one major reason: the federal tax code. The code is such that if you've lived in the home 2 of past 5 years as primary residence, a married couple gets up to one-half million dollars in capital gains FREE OF TAX. For example, if they paid $1.33M for their residence, and sold it 2 or more years later for $1.83MM, that $500k capital gain on the settlement statement hits their bank account IN FULL, the feds take nothing. This element of the tax code makes serial flipping of primary residences very do-able, and potentially very profitable.

Thank you for chiming in with a voice if reason.

I’m pretty sure we’ve never heard anyone describe them as house flippers either. This might have been a hobby, a design outlet, or part time venture. It’s not fair to use a broad umbrella of describing them as “house flippers” imho.

 

[Cryptic]

The goal in flipping is to move property and make money. It can be a lucrative career on its own, without the need for a corporate job.

This is why I didn't find it surprising to learn that Alan's husband sold their house not long after Alan's disappearance. It was probably something they had already planned.

How many houses did they 'flip'?
Was it not as successful as they hoped, so Alan went back into his career and got hired at KPMG?

I think the key words are "can be" lucrative.

Several years ago, a flipper (ex software engineer who got tired of the cooperate world) doing a project in my neighborhood told me that flipping in DFW was no longer easy.

He then stated that all the entry level, easy flips were gone- with many having been flipped two times, sometimes more. Thus, flips had gone up market with more sophisticated buyers and well funded, more sophisticated competition.

He added that marketing to more sophisticated buyers then requires higher end contractor and professional designers (designing a house that others want to buy can be hard), all of whom charge accordingly- and the needed higher end contractors can be hard to find. Projects can become money pits.

Evidently, a contractor placed a lien on one of AW's flip homes. This could indicate that not all was well with the flipping and that even cooperate level business people could face an expensive learning curve.

 

[Knox]

I think the key words are "can be" lucrative.

Several years ago, a flipper (ex software engineer who got tired of the cooperate world) doing a project in my neighborhood told me that flipping in DFW was no longer easy.

He then stated that all the entry level, easy flips were gone- with many having been flipped two times, sometimes more. Thus, flips had gone up market with more sophisticated buyers and well funded, more sophisticated competition.

He added that marketing to more sophisticated buyers then requires higher end contractor and professional designers (designing a house that others want to buy can be hard), all of whom charge accordingly- and the needed higher end contractors can be hard to find. Projects can become money pits.

Evidently, a contractor placed a lien on one of AW's flip homes. This could indicate that not all was well with the flipping and that even cooperate level business people could face an expensive learning curve.

On the flip side, a lien could also have been placed as a simple matter of good business practice. We have worked with a liner construction company for over fifteen years. Every two years we do a new liner and they lien our project. It's simply their business practice to do so. Just another POV, but you could be right on in your thinking.

 

[TruthIsStranger]

It is common for folks to live in houses they flip for one major reason: the federal tax code. The code is such that if you've lived in the home 2 of past 5 years as primary residence, a married couple gets up to one-half million dollars in capital gains FREE OF TAX. For example, if they paid $1.33M for their residence, and sold it 2 or more years later for $1.83MM, that $500k capital gain on the settlement statement hits their bank account IN FULL, the feds take nothing. This element of the tax code makes serial flipping of primary residences very do-able, and potentially very profitable.

I worked for a realtor that was always flipping houses that she lived in, so I have seen this done several times.

 

[Cryptic]

Every two years we do a new liner and they lien our project. It's simply their business practice to do so. Just another POV, but you could be right on in your thinking.

That is interesting and a good point.

I did not know that one could lien a project against potential non payment. Rather, I thought one needed to show actual non payment to a Court.

Lets say that the contractor placed a "Preemptive" type lien on one of the homes. I am thinking that if the lien still existed at the time of sale, it would indicate an actual case of non payment (payment before sale would result in the contractor removing the lien?).

S0..... the key indicator regarding possible cash flow problems with the flips might not be the placement of a lien (as you pointed out). But... when the lien was removed?

 

[annpats]

But... when the lien was removed?

28th October 2020.

 

[itsrak]

It seems to me this case boils down to two questions at this point:
1) Is this a murder case?
2) If so, was the impetus for murder
a) money/greed - robbery/car-jacking/e$tate/property or
b) love/lust/relationship - love-triangle, soured relationship, app hook-up gone bad or
c) both a) and b)

 

[shefner]

Thank you for chiming in with a voice if reason.

I’m pretty sure we’ve never heard anyone describe them as house flippers either. This might have been a hobby, a design outlet, or part time venture. It’s not fair to use a broad umbrella of describing them as “house flippers” imho.

What's wrong with being, "house flippers?" It's certainly not a derogatory term. It's been used throughout our discussions about Alan and Rusty. Even Alan's obituary mentioned that he built and remodeled numerous homes.
I am quite proud of my relatives. They take abandoned or neglected properties and do amazing things to restore them and make them useful and beautiful. It takes a special person to not only have that kind of vision, but to have the knowledge, business savvy, and skills to make it happen.

The main reason I mentioned house flipping is because that type of work brings lots of new contacts and relationships that could potentially play a part in what happened to Alan.

 

[Cryptic]

28th October 2020.

Would you also know when the house was sold?

 

[itsrak]

Would you also know when the house was sold?

Public records show that Mr. White and is partner acquired the home March 29, 2019, and that Mr. White's partner sold the home on Feb 9th of this year, around 3.5 months after Mr. White went missing, for $1.83 million. You may recall the televised interview of Mr. White's partner and Mr. White's mother conducted three weeks after Mr. White went missing - I am quite sure that was taped on the property.

'It’s a complete nightmare': Mom, partner of missing Dallas businessman plead for his safe return | wfaa.com

 

[annpats]

Would you also know when the house was sold?

No, I don't know that, sorry. I just read somewhere this was when the lien was removed, and it was practically the same week he went missing.

Maybe someone from Dallas can find local house sales records online?

 

[annpats]

I believe Mr. White's partner sold the home in Feb/Mar of this year, around 6 months after Mr. White went missing, for $1.83 million.

Someone knew! Well done!

 

[Valiant]

Some people enjoy the process more than the actual results.
I have friends who restore cars, then sell the just restored one to start a new project.
I have friends who do the same with houses.
It can be a way to make money - but it can also just be what the person enjoys.

 

[Valiant]

For anyone who wants to view property records:
DCAD: Find Property By Owner Name

 

[Knox]

That is interesting and a good point.

I did not know that one could lien a project against potential non payment. Rather, I thought one needed to show actual non payment to a Court.

Lets say that the contractor placed a "Preemptive" type lien on one of the homes. I am thinking that if the lien still existed at the time of sale, it would indicate an actual case of non payment (payment before sale would result in the contractor removing the lien?).

S0..... the key indicator regarding possible cash flow problems with the flips might not be the placement of a lien (as you pointed out). But... when the lien was removed?

I remember looking at all the various property records back at the beginning of the case. Here's the link Search
I see mechanics liens dating back to 2009 on the various properties in Alan's name (James Alan White).

I'll say this - if I were a contractor and doing a job for a developer or private party. I would lien the project regardless, you never know what could go wrong along the way in a speculative venture. I'm not super knowledgeable in all the information flow at the above link, maybe someone else could take a look to see if the more recent documents indicate potential cash flow issues.

 

[Cryptic]

28th October 2020.

Mr. White's partner sold the home on Feb 9th of this year, around 3.5 months after Mr. White went missing, for $1.83 million.

I'll say this - if I were a contractor and doing a job for a developer or private party. I would lien the project regardless, you never know what could go wrong along the way in a speculative venture.

Providing this is the lien home, it looks like the lien was removed four months before the sale of the home.

This would seem to greatly increase the chances that the lien was a "preemptive" type lien described by Knox that that the contractor places "just in case" things go south and they do not get paid.

In turn, this reduces the indicators of cash flow problems with the flipping- though they could still exist. As a flipper told me a few years back: "DFW flipp'in aint easy"- for many reasons including the need to find and then be able to fund, up scale project possibilities with the potential for comparable escalating costs.