There is a way to move your property out of town, out-of-state, out of your name, out of your estate, and out of your tax return. You can get it out of sight and out of mind.
How can you do that? Deed it into a land trust with an out-of-state trustee.
How do you get it out of your tax return? You report the income on a K-1 trust return to an assembly trust that nets all the properties and enters a one line number on the trust return. Learn the benefit of trusts if you do not already know them. They deliver more benefits than LLC's and other entities at little cost.
You should reecive a 1099-R showing the amount rolled over. It won’t affect your taxes, but will need to be shown on your return as a gross distribution, with -0- taxable. It should have a distribution code G. This will all be reported in the year you roll it over. Subsequent years will not have any reporting unless you withdraw from it.
Tax reporting of real estate held in trust is done on IRS form 1041, which is a K-1. It is not a distribution. Several K-1’s can report to another trust which nets all incomes and reports on one line on the back of the schedule E. Learn how to make and use trusts in seminarson October 27 in Tampa and November 17 in Orlando or from the courses described in our products section.