Ownership of real estate by business organizations Flashcards
Sole proprietorship
When one person owns a piece of property and title, in that persons name, this is ownership in severalty, because ownership interest is severed from all others.
Partnership Estate
Choose either tenancy in common or joint tenants
Tenancy in common :
you may sell your interest or interest may be passed down to heirs does not have the right of survivorship, the other owners don’t automatically get your share of ownership upon death. Must pass ownership of their percentage of the property in a will.
Joint tenants :
The right of survivorship, your partner gets full ownership, or your partner dies. You get full ownership.
What are two types of partnerships?
General partnership :
personal liability to partnership debts that exceed the partnership assets. General partners are jointly and separately liable for these debts. The creditors will hold either partner liable.
Limited partner:
Always has one or more general partners who assume liability, the other partners are limited in their liability related to the amount of money they have contributed. Limited partners are also limited in authority to protect their immunity from the partner deaths, they may not participate in managing the partnership.
Limited partnerships are a common form of holding real estate, usually the general partner is the one who discovers the investment opportunity, and brings it to the limited partners for their funds.
Corporation estate
Corporations have tax rate separate from individual tax rates. They can hold, transfer title to real property, and give, or hold a mortgage to secure a debt owed to the corporation. Property owned by corporation is on in severalty, a.k.a. property owned by a sole proprietorship. The corporation bylaws give authority to name to individuals who may sign documents on his behalf.
Corporations may be subchapter
S : (function as corporation text as a partnership) does not pay corporate, income taxes, avoids double taxation. May deduct losses from their income taxes, representing their share of losses.
C : ( must pay corporate income tax to the IRS, pay double taxation, once at the corporate level, and once again for the shareholder level)
Limited liability company’s LLCs
Limited liability, partnership’s LLP’s
Estate
Favorable forms of business, in terms of taxation and liability. Owners who are called members, not shareholders, are not personally liable for LLC/LLP obligations, are taxed as partnerships, and do not require a general partner.
Syndicates and joint ventures Estate
Syndicate
Groups of investors, pulling their money in pursuit of a single investment goal. Organized by a sponsor who does the investment lake work and property manager who asked many investors to join real estate investments. The sponsor can be in an individual or business organization. (Add here to the rules and regulations of securities and exchange commission.)
Joint venture, temporary organization formed by two or more parties to invest in real estate or other investments. Participants may be a corporation, partnership, LLCs, or other entities. The parties may hold title as joint tenants or tenants in common.
Sole proprietorship
Can be conducted and title of property using your own name
Characteristic
Or
Not a characteristic
Characteristic
Sole proprietorship, business can be conducted and title of property held using your name in combination with business name.
Characteristic
Or
non-characteristic
Characteristic
If you operate as a sole proprietorship, your business legal name is your full name. You can indicate other words along with your full name however, you must include your full personal name, if you have a sole proprietorship.
Sole proprietorship
Business can be conducted, and title of property held in your business name.
Characteristic, or non-characteristic.
Non-characteristic
Sole proprietorship, ownership of property is owned in severalty
Characteristic
Non characteristic
Characteristic
Sole proprietorship, ownership of property can be in the form of tenancy in common
Characteristic
Non-characteristic
Not a characteristic
Partners participate in partnership management
General partners
Or
Limited partners
General partners
Silent partner is a general partner or limited partner?
Limited partner
Personally liable (both jointly and separately) if partnership that succeed partnership assets
General partners
Or
Limited partners
General partners
Not liable if partnership debts exceed partnership assets
General partners
Or
Limited partners
Limited partners
Does a corporation exist only in law (is intangible)
Characteristic
Not a characteristic
Characteristic
Is a corporation, physical, brick, and martyr establishment
Characteristic
Not a characteristic
Not a characteristic
Corporation, shareholders, get taxed at both the corporate an individual level
Characteristic
Non-characteristic
Characteristic
Can corporations receive, hold, transfer title to real property, and make it hold to a mortgage to secure a debt owed by the corporation
characteristic
Not a characteristic
Characteristic
Does a corporation exist as a subcontractor S corporation or C corporation?
Characteristic
Not a characteristic
Characteristic
Tito asks 150 friends to invest in a strip mall, they would all make 22% on their investment within eight months. Which type of organization best describes Tito scenario?
Sole proprietor
Corporation
Limited liability company
Syndicate
Syndicate
What is a joint venture organization?
Two or more people come together for the single, temporary purpose of buying real estate, improving the properties, and selling for profit
Remember, temporary
Condo Estate
Fee simple ownership, owns real estate, best bundle of ownership, the unit and all the space inside the unit belongs to you, and you also share ownership in the common areas.
Co-ops Estate
Is a nonprofit Cooperative corporation that owns the land, buildings, and all rights and interests in the corporation. Individual, shareholders, a.k.a. unit owner/residence, don’t on real estate, they don’t hold title to the property, and they don’t receive a deed for the unit. They owned corporate shares which are personal property.
Residence pay a monthly or annual maintenance fee to the board of directors that manage the cooperative, attend meetings, share work on the property, is a community day-to-day living.
Not on as real property, only as personal property, and cannot sell home without offering to the community before putting it on the market.
Title to land and building is held by a corporation
Cooperative ownership
Condominium ownership
Cooperative ownership
If you buy into a cooperative, you do not hold title to any land or building. You own shares of organization, but the cooperation actually holds the title.
Title to unit held by unit owner
Cooperative ownership
Condominium ownership
Condominium ownership
You own Personal property and not estate
Cooperative ownership
Condominium ownership
Cooperative ownership
Real property
Cooperative ownership
Condominium ownership
Condominium ownership
Ownership may be transferred similar to other properties
Cooperative ownership
Condominium ownership
Condominium ownership
With condominium ownership, you on the unit, just not the common areas of the building. As such, you can sell your unit similar to any other real property you own.
Ownership may follow occupancy agreement, and Can be approved/disapproved by the board
Cooperative ownership
Condominium ownership
Cooperative ownership
John and Dale are married in San Francisco, and soon purchase a condo. They’ll take the title to it by default as ————— according to California law
Community property
Joint tenants
Tenants by the entirety
Tenants in common
Community property
In California, and estate for years is————
Annual chattel
Chattel annual
Chattel real
Personal interest
Chattel real
An estate for years, such as year-long lease is known as title real in California
Which of the following is NOT a characteristic of corporation?
Corporations are recognize legal entities
Corporations are tangible and nontaxable
Corporations are taxable
Corporations have tax rate separate from individual tax rates
Corporations are tangible and nontaxable
Lucas, Ivan, Chad and Tom, own a property as joint tenants. After a few years, Ivan sells his interest to Beth (with permission from Lucas, Chad and Tom). Chad dies intestate but is survived by a wife, Amy. Tom also then passes away, but wills his property to Monique. Who owns the property after Tom’s death?
Lucas
Lucas and Tom
Lucas, Monique, and Amy
Lucas, Tom, Amy, and Monique
Lucas
Joint tenants are allowed to sell their interests, so Beth becomes a property owner when Ivan sold his interest. However, joint tenancy is not inheritable, but instead includes the right of survivorship. I Tom’s and Chad interest passed to Lucas and Beth.
Limited liability, companies in limited liability, partnership, or favorable forms of business———
Owners of LLC or LLP are personally liable for LLC/LLP obligations
They are taxed as partnerships
They don’t require a general partner
They’re considered temporary and can be quickly dissolved
They don’t require a general partner
LLC/O LPs don’t require general partners, who assume liability, jointly, and separately
Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Len shared the home with Stella’s nephew Drew, to whom Stella willed her share of property. What type of ownership is this?
Estate in severalty
Joint tenancy
Tenancy by the entirety
Tenancy in common
Tenancy in common
Siblings Julia and Jean are co-owners of a small retail building in which a tanning salon is currently operating. Jean really wants to leave his ownership interest to his son when he dies, but the way in which they on the property doesn’t allow him to do so. What type of ownership do they have?
Joint tenancy
Tenancy at the entirety
Tenancy in common
Tenancy in severalty
Joint tenancy
Which of the following describes an estate for an unknown period of time, with either party, permitted to terminate the lease by giving notice to the other?
Estate at will
Estate for years
Leasehold estate
Life estate
Estate at will
An estate at will is an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other.
