If you are buying a home or other real estate, your attorney will have asked you how you want to take title. If she didn’t, or if she did and you didn’t know how to answer her, don’t worry. In that case, she will have asked you other questions to determine how you should take title. Example of some of these questions would be: Are you married? Is your spouse going to be on the deed with you? Will you be living in this property? How is your co-buyer related to you? What do you want to happen to your ownership in the property when you die? This information will help your attorney determine what the best type of tenancy is for you. Assuming you are not taking title in the name of a company, there are essentially four ways to take title in real estate in Illinois. The information… read more →
If you are reading this post, you’re probably thinking about what will happen to your assets when you die. Really, you should stop wondering and pick up the phone. Call your attorney. Set up a proper estate plan — whatever that may be for you. It could be as easy as a simple will or as complicated as a complex trust. There is no substitute for good advice and well-drafted documentation. But if you are not ready to commit to estate planning yet, at least you should be aware of what will happen to your estate if you don’t do anything. The bottom line is, anything that is not transferred through beneficiary or co-ownership designations will be transferred to your heirs-at-law. So who are your heirs-at-law in Illinois? If you’re married and you have no children, your heir-at-law is your spouse. If you’re married and you have children, your heirs-at-law… read more →
Every summer in Cook County, we get our second installment property tax bill for the prior year. This June, for example, we’re expecting the bill for the second half of last year. The bills tend to go up a bit each year, but every three years, you open that envelope and recoil. How could your taxes go up so much? After all, the last two years they hardly increased at all! Did they find a platinum mine under your house? Unfortunately, no. There’s no platinum mine, nor have you struck gold or oil. You’ve just been struck by the triennial reassessment. The Cook County Assessor’s office has divided Cook County into thirds, and each year, one-third of the county is reassessed. One year, the Cook County Assessor’s office reassesses all properties in the City of Chicago. The next year they reassess the north and northwest suburbs. And the year after… read more →
Will the woes of landlords never cease? It has been a difficult year for everyone, and residential landlords are in no better shape than anyone else, particularly when their tenants are not paying rent. Since March of 2020, the governor has issued a number of orders staying evictions. The latest of these orders, issued early this month, extends the eviction moratorium through May 1, 2021. To determine if a tenant can be evicted, there is a four-part test. If the tenant cannot answer yes to each part, he can be evicted: Part One: a. Did the tenant earn no more than $99,000 in annual income in 2020 (or no more than $198,000 if filing jointly)? OR b. Was the tenant not required to report any income in 2019 to the U.S. Internal Revenue Service? OR c. Did the tenant receive an Economic Impact Payment pursuant to Section 2001 of the… read more →
We all know Illinois is bleeding residents. With our high taxes and high cost of living, residents are fleeing. So it’s not unusual that Illinois is trying to be creative to bring people back in. The Illinois Housing Development Authority (IHDA) has developed the SmartBuy program, which not only provides a loan of $5,000 for closing costs, but also helps pay off student loans. And the state isn’t just paying off small amounts of student loan debt, either. They are paying off up to $40,000 of debt, or 15% of the purchase price of the home, whichever is less. If the student buys a home for $266,700 or more, they would get the full $40,000 in student debt relief. What do you need to know? Here’s a simple list: There are income and purchase price limits, which you can find here. For example, if you live in the Chicago area,… read more →
Many first-time homebuyers, especially in competitive markets, end up in starter homes as a part of their first foray into the real estate market. The idea of a “starter home” goes back to World War II. After veterans completed their service, they returned home and took advantage of a provision in the G.I. Bill that guaranteed them affordable mortgages. The increased demand caused a housing boom, specifically for smaller, low-cost homes where the veterans could start their families. Historically, these properties tend to be smaller in size than one might expect from a single-family unit, but the idea behind them is two-fold: these smaller properties help introduce individuals to the responsibilities of homeownership, while also serving as a launching pad– something to help a homeowner build equity before eventually moving on to a bigger and better property. What to look for in a starter home If you think you might… read more →
Foreclosure is a bad thing right? Families being uprooted from their homes – bad. People losing their life savings when the value of their home tanks – bad. Empty homes attracting mischief – bad. Unkempt properties creating an eyesore – bad. Credit scores plummeting — bad. Sure, all of those things are bad. No one wants to be in that situation. Heck, most people don’t even want to be living on the block where all that is happening. It may not seem like it, but there is an upside to foreclosure. Sometimes foreclosure can be the kick in the pants you need to get your finances back on track. Let me explain how: Foreclosures typically take a long time to process. Cook County is particularly slow. It’s not unusual for a foreclosure to take 6-12 months, sometimes even more. So how is this a good thing? Well, if you were… read more →
So what happens if someone deeds real estate to another person, but makes a mistake in the deed? If the proper language is not used in a deed, can it still be used to convey real estate? The answer is: Maybe. A Deed may be black and white on its face, but the interpretation of the deed can be far from black and white. Per statute, quit claim deeds are required to include the legal description of the property conveyed. 765 ILCS 5/10 (West 2014). But back in 1935, the Illinois court determined that even if there is some uncertainty, a deed should not be declared void so long as “it is possible, by any reasonable rules of construction, to ascertain from the description, aided by extrinsic evidence, what property it is intended to convey.” Brunotte v. DeWitt, 360 Ill. 518, 528 (1935). How do we reconcile the statute with this… read more →
Using money from your IRA to purchase real estate has quite a few pitfalls. Here are the risks: If you use IRA money to buy real estate, you cannot live or work on the property. There can be no “self-dealing”. You can’t physically invest your personal efforts into fixing or rehabbing the property. Even if you normally do your own construction work, you can’t do that if you used IRA funds to purchase the property. Losses from the sale of real estate are not tax deductible. Loss of rent is not deductible. You can’t claim depreciation and amortization on your tax returns. The cost of any repairs to the real estate must be paid from IRA funds. You can’t use your own money to pay for repairs. You can’t even loan money to your IRA to pay for repairs. If you are using the property for rental purposes, you MUST… read more →
Single-member limited liability companies, or LLCs, can be a great tool for real estate investments. Here’s what you need to know: 1. You don’t have to file separate tax returns for your single-member LLC. The LLC becomes a disregarded entity for purposes of federal income tax. If you own rental property in a single-member LLC, it gets reported on your personal income tax return (Form 1040). And if the single-member LLC is owned by some other entity, like a partnership, the LLC’s taxes are reported on the partnership’s income tax return. 2. You do, on the other hand, have to file federal payroll tax returns for your single-member LLC. If you have employees on payroll, you’re treated just like a corporation for purposes of payroll tax returns. 3. You have liability protection, similar to the liability protection you would get it if you were a corporation. If you own an… read more →