On-Site Employee Agreement
Owning real estate can bring great returns, but small mistakes have the potential to erase many of these gains. If you are employing a property manager, I suggest you contact your Ministry of Labour and Industry to identify your reporting obligations. Also remember that some states do not allow you to provide “free rent” as a total allowance. These states treat part of the rent as a minimum wage tax owed to the manager for his services. Best of success with your investment and here is a model management agreement for your evaluation. Independent Contractor Real Estate Administrator If any of these conditions are not met, the employer must include the net value of the accommodation on the employee`s W-2 form and the worker must report that amount as income on his or her tax return. Moving forward until 2012, and a young listener who wanted to make a name for himself, looked at Tim`s limited partnership and found out he owed Labor and Industries $90,000. According to the accountant, the assessment was based on Tim`s employment of three full-time workers over the past three years (both roofers and the housing administrator). The auditor did not understand the manager`s duties in the field and incorrectly assumed that the manager and roofers were working full-time on the premise. CAA members have access to other resources in this area. However, federal taxation is not the only governing body to regulate housing provided by employers. State law must also be consulted to ensure that you do not disdain other rules. A recent visitor to my office, Tim, learned this lesson in a strong way.
As an employer, you can exclude the value of the rent free for your housing manager, provided that his job meets three conditions: if you have a manager on site, it would be advisable to keep a recording of his hours and get in formal contact with the manager. The contract should indicate the obligations, remuneration and expected schedule of the executive. It would be best to treat your supervisor as an independent contractor so that you can avoid withholding and insurance problems. If this is not feasible, you should consider having your supervisor provide you with a monthly log of his hours. You should also consider setting up a property management company and recruiting the manager through the company to manage your property. This would provide additional liability protection and, if you are properly structured, you may be able to avoid the issue of compensation for the free rent mentioned above. If you own a multi-unit complex, you have a real estate manager on site. Typically, these plans consist of a base salary and a free rent, the amount of remuneration corresponding to the number of units and the amount of work. If on-site housing is a property to be a property manager, then federal income tax is not a problem for the owner or the trustee. Clint Coons Real Estate Attorney of Tacoma, Washington Tim acquired a 16-unit residential complex in 2008 and placed it in a new limited partnership, managed by a corporation, to protect the assets.