Underused Housing Tax – Serious Implications for Real Estate Investors


Laurel Simmons: Hi everyone, and welcome to another podcast episode of the REITE Club. I'm Laurel Simmons, a co-founder of the REITE Club, and my co-host today is Katherine Nelson Riley, who is our wonderful operations manager. Hey Katherine. This is a pretty important podcast, isn't it?

Katherine Nelson Riley: It really is. These are new tax laws and implications for investors that have literally just recently come into effect and the communication channels from the government to be able to get them out because they are so new and the timing to win taxes are due. And some of these tax law implications if they're expensive. They're between $5,000 and $5,000. And if we don't know about it.

Laurel Simmons: It's really important. That's why we're doing this special podcast. We actually recorded this out of a virtual event that we had, but we felt that the topic was so critically important to our audience that we decided to turn it into a podcast. So our speaker today is Daniel DiManno, and he is talking about the implications of the underused Housing Tax Act. It's really critical that you listen to this.

There are severe penalties if you do not file for your rental properties by April 30th. And whether your rental properties fall under this new act. I don't know. That's a question you have to determine or an answer you have to determine by looking at your portfolio and talking to your accountant.

If you do not file and you do not, and you have properties that fall under this act, you could be in for some serious penalties. So just for heaven's sake, listen, call your accountant, find out what's going on. Get this paperwork done. It's paperwork. That's the way it is, right Kaherine?

Katherine Nelson Riley: Absolutely. And Daniel he's a partner at Capstone l c Chartered Accountants. And basically he's literally outlining and giving you a step to step on what, to have the conversations, the base to have your conversations with your accountants and what to expect for filing in April of 2023 and subsequent years, what your obligations are and the implications of not filing or filing incorrectly.

Laurel Simmons: It's really important. So with that, we'll go right to the episode. So with that, Daniel, I'm going to turn it over to you.

Daniel DiManno: Thank you, Laura. I appreciate that. Thank you for the introduction. So this, I don't know if I can make this as exciting as Seth's presentation, but I'll do my best. Unfortunately, there's probably more bad news here, although it's valuable information. It's not as exciting as Seth's was, but we'll see. I'm sure everyone will get a lot of value out of it nonetheless. If I could share my screen here. I believe I can.

Here we go. Everyone can see that. Okay, great. So where do we start? This is basically what I do I speak with various investor groups, real estate investment groups, investment clubs year in and year out. And every year we do a tax update, right? We provide information on what's new in the budget. We send out reminders.

We provide reminders of filing deadlines, things of that nature. What's new in the tax system This year in particular, as Laurel mentioned, there's a couple big ticket items that we typically don't see, especially not two at a time, two in one specific year. There's been a big push at the last minute.
Now as crunch time comes towards tax season to educate our clients and everyone in our network. About these new legislative rules. The two main ones I'm referring to are the anti flipping rules, which came into effect the last year for this coming year, 2020, or this current year, 2023, and the Underused Housing Tax Act, which received Royal Assent back in June of last year.

It applies to all homes in the year 2022. So firstly, the anti flipping rules. What are they, what do they mean? How will these impact homeowners or renovators builders flippers? So these rules are effective January 1st, 2023. So they're brand new. They came into effect just a couple months ago.
What it is, these rules were designed to prevent people from individuals or corporations from buying property, renovating and flipping with a short, within a short amount of time and making a business out of it. People refer to it as the BRRRR method. People refer to it as flipping. So the government is trying to crack down on that, and what they've done is imposed rules that stay safe.

If you own a property for less than 12 months and subsequently sell it by default, that income will not be subject to the capital gains treatment. You'll have to pay business tax on it. And this is regardless if you're a corporation or an individual, they're basically getting rid of the opportunity to claim it as a capital gain.

For anyone that doesn't know what that means specifically, a capital gain is taxed. When you get capital gains treatment on the sale of an asset, you are allowed to only pay tax on 50% of the actual profit. They're taking that away, meaning you'll have to pay tax on 100% of the profit again if the property is sold within a 12 month window.

Luckily and thankfully, because this is intended to avoid people making a business out of flipping properties. They created some exceptions, and there's quite a broad scope of exceptions. So this is good for the homeowners who have life circumstances or events that require them to sell a property within the 12 month period and don't want to be penalized for it.

As an example if in the event of a death in the family or a child being born, being brought into the household, these are life circumstances that would allow you an exception out of these rules. If you had a parent, an elderly parent as an example, or someone who needed attended care move into your house with you and you needed a bigger space or a more suitable home.

You would be exempt from these rules. If there is a divorce or separation, a breakdown of a relationship or a marriage that extends longer than 90 days and you're required to sell the house because of it, you would not fall under these rules. If there's any circumstance where the homeowner or someone within the home becomes disabled or seriously ill they lose their job.

They're not able to pay for the house anymore, and they can support that or substantiate that, they would be exempt from these rules in the event they sold the house. If you are required to relocate for the purpose of employment, perhaps your employer opened a new office and asked you to relocate, or you were given a promotion and you had to move for the purpose of work and sell your property.

In that circumstance, as long as the move or the relocation was more than 40 kilometers away from your current home, then you would be exempt from these rules. And lastly, if there's any destruction or expropriation of the property, destruction, obviously being a natural disaster or natural cause, or an event like a fire or a flood where the house was completely damaged and you had to get rid of it, or it wasn't feasible to rebuild or repair, then you would be exempt out of these rules.

Those are the basic rules around anti flipping. It's relatively straightforward. Quite frankly, these rules were unwritten for the longest time and people tried to manipulate them. The government simply put them down in writing now so that it was clear to everyone. And there's no gray area as to what the ruler is not the rule.

Generally speaking, most people, as a rule of thumb, prior to last year, always followed the 12 month rule. So it's not a big difference. But now the government drew in the sand to make sure everyone knows what their position is.

Now with that said, we can move to the underused housing tax. This one is a bigger one. This is probably gonna impact a lot more people and likely impact people who are unsuspecting of it. And you'll see why as we go through it. So what is the UHT, what are the Underused Housing Tax rules?

This is effectively a 1% annual tax that is being imposed on the value of residential real estate in specific circumstances. And it's meant to target non. Resident or non-Canadian citizens who own residential rental property that is vacant or underused within Canada. So that's a bit of a long summary and we'll break it down for you because there are a lot of minute details that are important to pay attention to.

As mentioned earlier, these rules came into effect. They received Royal Ascent back in June. They were proposed in the budget last year by our government, and they are effective January 1st, 2022. So last year, meaning you need to file this tax return if it applies to you by April 30th, 2023. So we only have about a month and a half or so to learn about this, understand if it applies to you and file the tax return.

What is it? Who does it apply to? Who does it not apply to? When do you have to file, when do you not have to file? So it's important to understand, and we'll break this up into affected owners, individuals who are required to file the UHT return, excluded owners, individuals who are not required to file the return.

Then we'll get into who is subject to tax and who is not subject to the tax. So affected owners. Who does that include? It includes any foreign or domestic, non-public corporations, meaning any privately held corporation needs to file this UHT return. Any individuals who are non-residents or non-citizens of Canada are required to file this return if they own residential rental pro residential property.

Not explicitly any residential property. No, it doesn't have to be a rental. We'll get into that also in a later slide. Trustees of trusts, including bear trusts, are required to file this. So if you own, if you are the trustee of a trust and that trust owns property on behalf of its beneficiaries, the trustee being the title owner of the property is required to file a UHT return and partners of partnerships.

If you own a property in partnership with other owners, you'll be required to file the UHT return. So it gets a little bit confusing because when they speak of individuals, you'll see certain individuals that, like a Canadian citizen for example, is excluded. From filing the return. But if that individual is a trustee of a trust who owns property, all of a sudden they become an affected owner.

They become an individual who has to file the UHT return. Likewise, if you are a Canadian citizen and you're a part of a partnership, you then have to by default file the UHT return. I think what happened, and it's only my best guess, they drafted this legislation relatively quickly. They didn't add enough specific details into the exclusion. There were some extra individuals or people or circumstances that got captured in the broader net that they were trying to cast. So those were the affected owners.

Now we talk about the excluded owners, individuals and entities that do not have to or are not required to file the UHT return.
As mentioned, these include individuals who are Canadian citizens or permanent residents of Canada, publicly traded companies, mutual funds, and real estate investment trusts or REITs as they're known as registered charities, co-op housing, cooperative housing entities and government or government bodies are excluded from filing this return.

If you fall into one of those categories, or you work for an entity as such, as one of the ones listed, you're exempt from having to file this return. Now once you've established whether or not you need to file a return or not, let's say once you've established, you're required to file a return, the next step is understanding what property qualifies as a property under these rules.

What's defined, what is the definition of a residential property in the circumstance of the UHT Act? And essentially there's a few things to consider. The main one is any residential property. It doesn't have to be just rental property, but any residential property. So cottages, for example, could potentially fall under these rules or a terror if you have one.

That type of property would be included as well as residential rental property. But there's limits to it. So multi-family properties, any units, any buildings or houses that have more than three units are not captured under these rules, under these laws. So any home from one to three units is considered a residential property, by definition, in the underused housing tax app, any semi-detached properties, obviously any duplexes, row houses, or condos all get captured within these rules.

It gets a little bit tricky when you're talking about, let's say mixed use property where there's, let's, as an example, a strip mall, a strip plaza where there's commercial on the ground floor and a couple units or a few units on the on the second or third floor there, there's some play there, and there's some determination that needs to be had as to whether or not the residential portion of the property represents more than 50% of the overall property, and in the event the residential property represents more than 50% total, then you are required to file this UHT return.

It gets a little tricky when you know you're working and unfortunately the government has not defined how to split that up. Does the basement get included? If that's part of the commercial what if it's exactly 50 -50 in terms of square footage, residential versus commercial? What do you do?

They haven't outlined any guidance for that. We would probably err on the side of caution in those circumstances and we would look at things like how much of the parking is allocated to the commercial units versus the residential units. Maybe you can extend your math out that way to see if you can swing it one way.

Anytime we've been advising our clients any circumstance where you're unsure or you think you might be at risk of being deemed residential. You should err on the side of caution, file the UHT return and avoid CRA deeming you to have filed incorrectly or missing the return and penalizing you for it because as you'll see in a later slide, the penalties for forgetting this wrong or not filling are quite punitive.

That's really created the biggest scare for people because this is all coming into reality quite quickly. So I already mentioned a few of these. I'll just go through a couple more in detail. What residential properties are excluded? So meaning if you are an owner of these types of properties, you do not have to file a UHT return.

High-rise apartments, multi-family units, they're exempt from filing the UHT return. Fourplexes, five plexes, multiplexes are exempt boarding houses, hotels, motels, bed and breakfasts are exempt from filing and trailer park homes, mobile homes. Those, they are all exempt from having to file a UHT tax return.

The tricky one is condos. You gotta be careful with these ones cuz if you own a condominium or multiple units within a condo building, you have to file a separate UHT return for each condo unit cause they're separately titled they're separately deeded. There's an interesting case for a client of ours.

They bought what looks like on the surface, a multi-family an apex, a multi-family building. And he owns the entire. But on, but when you look under the hood, he actually, each property is separately deeded, separately titled, and it acts like a condominium corporation. So under that circumstance, although he owns the entire building and it looks like a multiplex, he has eight separate units and he has to file eight separate UHT returns.

That's a rare situation but it does happen. And if any of you, or anyone you know, is in a circumstance like that, you've gotta be careful to not miss that. Because again, once we get into discussing the penalties, you'll see it's quite punitive to miss these returns.

Now, once you've established you are a filer, you are an affected owner, and you have a property that qualifies as needed. To have this HST return prepared, the next question becomes, do you owe the 1% tax or not? And so there's certain exemptions to the tax and they're based on several things. The usage of the property, its availability for use, the ownership and what else do we have here?

We have whether or not the property was available. So what I mean by that, and we'll get into the details, exemptions for tax. If it was your primary place of residence, you do not have to pay the tax If you have qualifying occupancy, meaning you have a tenant or the unit was rented for at least 180 days, you do not have to pay the tax.

You have to file the return, but you do not have to pay the tax. If you are a specified Canadian corporation, meaning you have foreign ownership or a shareholder of the corporation who is a foreign owner, and that individual or group of individuals owns more than 10% or less than 10%, rather, you do not have to pay the 1% tax.

Similarly specified Canadian partnerships if the partnership is composed of excluded owners, meaning people who are not Canadian residents, Canadian citizens, or they are specified Canadian corporations as listed above, you do not have to pay the 1% tax. Same applies for trusts. If the beneficiary, if each beneficiary is an excluded owner, meaning they're a Canadian citizen, Canadian resident, or a Canadian specified corporation.
You do not have to pay the 1% tax, but again, reminder, you still have to file the return the property if the property is not suitable for year round use. So maybe you couldn't meet the hundred and a 80 day rental mark, or you couldn't live in it full-time because it just wasn't suitable, the conditions of it, maybe it didn't have heating for the winter.

Under circumstances like that, you're excluded from the 1% tax, but obviously you'd have to prove this was the case. Seasonal accessibility. Maybe you have a cottage in a remote part of Ontario or Canada and you can't get there because the roads are not plowed or maintained or it's not safe to drive there.

In the winter, you would be excluded from having to pay the 1% tax. Additional exceptions. The property was not uninhabitable for more than 60 days because. Of flooding, fire, earthquake, tornado, anything of that nature. If the house was not livable for more than 60 days, you're exempt from the tax.

If you were in the process of renovating the property, you're exempt. And the renovation extended more than 120 days in the year. You're exempt from paying the 1% tax. If you bought the property within the year and you weren't, you didn't previously own this specific property in the prior nine years, I don't know why they've set that number as nine years.

If you bought the property in the year and it's the first time you've owned it, you're exempt from the tax. If the individual who owns the home, the affected owner passes away, dies within the year, and they own at least 25% of that property, they are exempt from filing from paying the tax.
They have to file the return. Their executive, their executor of their estate, or their representative is also exempt for one extra year from filing this.

In a circumstance where an individual is owner or part owner of a property, the pro the ownership structure requires, they file the UHT return.
That individual passes away and his proportion and ownership goes into his estate. The executor of that estate or trustee managing is exempt from paying the 1% tax for the year they passed away, plus one extra year, one extra calendar period. And if you're purchasing new construction property, if that property was not made available to you by the developer by April 30th of the year in question, then you are exempt from paying the 1% tax.

Now we get into the conversation about property value. We know that the penalty or the tax is 1% of the value of the property. So the question then becomes what is the property value. And the value is basically the greater of two, two particular things, the assessed value based on property tax assessments, and the most recent price that you would've paid for, or that the property would've traded for prior to December 31st, 2022.
Now, I've put that date in because I'm speaking specifically about 2022, but obviously that's a moving target every year that we move into going forward, that date will change. So if we're talking about 2023, it'll be based on the most recent sale price for December 31st. Up to December 31st, 2023, and so on.

If for whatever reason you don't have that price available because either the property traded hands, it was handed down by a family member, something like that, it was gifted, then we would need to determine value based on a written appraisal from an accredited appraiser, property appraiser. So that's how you establish your value and then you would apply the 1% tax to it.

Now, with regards to, and we mentioned, we don't, when I looked at our client list, and I've talked to many other accounts, we don't believe this tax is gonna impact most individuals, most property owners, but where there's a lot. Opportunity for the CRA to make money off of this is on the penalties because it's more likely that the penalties will generate revenue for the government compared to the actual 1% tax.

As you can see on the screen, the penalties that they're proposing or that they've stated they're gonna impose are quite substantial and they're the greater of 5% of the actual tax owing plus 3% of the UHT times the amount of months outstanding. So if you think about that, it's a 5% hit on the 1% tax plus 3% for every month that the return wasn't filed.

That's the greater of that amount, or 5% if you're an affected owner or individual or 10%. If you're a corporation. Again, keeping in mind if you do not, if you are an affected owner and you don't report the return, even if the tax isn't owing, you're still subject to a $5,000 penalty as an individual who didn't file and a $10,000 penalty if you're a corporation who didn't file.

Imagine you're an individual or corporation who owns multiple units and you're required to file a UHT return for each unit, and you don't, these penalties will be multiplied and they can add up quite quickly. I use the example of my client who owns eight units in one building and he owns them in a corporation.

He forgets the file or misses the filing deadline. It's $10,000 times eight units, $80,000 for not filing. Whether or not CRA is going to actually impose these penalties, or if they're gonna allow some administrative relief because it's the first year that's to be determined. I don't know. I'm seeing how the c r a has operated in the past when rolling out new legislation.

They generally allow a grace period, but again, that hasn't been, I haven't seen that written anywhere. I haven't seen that documented anywhere. So for now, we're operating on the basis that they're following strict rules. Whoever doesn't file is gonna get penalized based on these numbers. And that's pretty much it.

For the other used housing tax, I'm sure there's gonna be many questions on specific circumstances. But that's the 30,000 foot view of it. The last thing I wanted to highlight to everyone is deadlines. They're coming up, one of them actually already passed, as I gave this presentation about a week and a half ago, was the RRSP contribution deadline being March 1st.

Your personal tax filing deadline is April 30th for non self-employed individuals. The deadline for self-employed individuals is June 15th, but your taxes are still due April 30th. And the new one, the UHT 2,900 tax return is due April 30th. And that's pretty much it for me. If anyone has any other questions, I'm sure you will. I'll be happy to answer.

Laurel Simmons: Wow. Thank you Daniel. There are a lot of questions in the chat actually. I'm gonna start going through them then. You did talk about partners and I find it really interesting, like, how does the government define a partner? So if a husband and wife say that they own, maybe they only own residential property that they're renting out personally.

They each own their, they're in a partnership on this. Is that considered two people? I guess this is a two part question. Does everyone who's on, so if there's title first mortgage and someone's on second mortgage, do each of those people have to file? And a husband and wife situation. What are the rules around this? This is just so bizarre.

Daniel DiManno: It is and forgive me cause it's still a bit of a moving target and there's debate out there. We've reached out to many tax lawyers, tax specialists, accountants. There is dispute amongst them as to whether or not joint tenants, for example, or tenants in common would be considered a partnership.

Legally speaking, what I've been told from lawyers that by definition is not a partnership and they would not, so a husband and wife, for example, co-owning a property or being tenants joint tenants would not be considered a partnership for the purpose of the UHT Act. So I think they don't, I believe they don't get caught or captured under these rules. At first there was a lot of speculation that there would be, and it was a bit of a nightmare. But when we look under the hood we're treating it as if that's not a partnership. Okay.

Laurel Simmons: Second part was if you had a say, if someone that has a property, they're untitled, right? They have the first mortgage and someone comes in as a second mortgage with the two different individuals. Does each individual have to file on this one property?

Daniel DiManno: They're both, so the important distinction here is the title and that's based on land registry. So whoever's named on title would be required to file their own individual UHT return.

It's not enough to file one for the property. If you're an individual owner, you have to file. Or if two corporations, for example, in partnership own the property, each corporation would have to file their respective UHT.

Laurel Simmons: Okay. We've got more questions. So let me just see here. Looks like any residential property, three units are under this, held in an Ontario or Canada corporation must file the UHT. I think you've answered the answer is yes, correct?

Daniel DiManno: Sorry, can you repeat what were the parameters of that?

Laurel Simmons: If any residential property three units are under that is held in an Ontario or Canada corporation must file?

Daniel DiManno: That's correct.

Laurel Simmons: Okay. All right. Okay, when can we start filing this?

Daniel DiManno: Theoretically you can start right away. The rollout has been a little bit messy if you ask me, and there's a lot of uncertainty. So the important other thing that wasn't included in the slides is there you need to obtain a new what's called an u if you're a corporation, rather.
If you're a corporation, you need to obtain a number. So for anyone who's a corporate corporation shareholder or runs a corporation, they're familiar with an RC number, which is their business number or an RT number, which is your HST number. This is a new extension. It's the RU 001 or RU number.

You need to obtain one to add to your tax return in order to file. And that process, from what we've been told as recently as last week, Friday last week, was called the CRA. You can't get one over the phone, you have to do it online. So again, bit of a moving target. We have many questions ourselves.

We're working through it, but the underlying advice is if you believe you are an affected owner and you have to file, start looking into it immediately. Understand what you have to do, because you don't want to wait till the last minute and you don't, you're not prepared.

Laurel Simmons: Okay. I know the question, the answer to the question anyway, but I'm gonna ask it anyway. Can people fill these forms in themselves?

Daniel DiManno: Absolutely. And it looks a bit intimidating cuz it's several pages, about eight pages long. Most of it won't apply to you if you are an affected owner, meaning you have to file the return, but you're exempt from the tax. Most of the parts of the form you can skip.
It's just really a matter of walking through it carefully. The information is pretty basic, like the individual owner's names, the property title, the address or the legal address of the property. The role number, information like that, that you should have as the owner. The assessed value, that's the basic information.

It's not really technical, but it could be daunting for someone wherever possible. Cause again, for us there's a lot of risk filing it or not filing it, missing it as a professional service provider. A lot of the clients are saying to us, can I do it myself? And our answer is absolutely, it takes the risk off of us of not having to file it but yeah, it's something you have to be aware of for sure.

Laurel Simmons: Okay, here's another question. What about mutual fund trusts? Do they have to file?

Daniel DiManno: No, mutual funds, REITs, publicly traded companies are exempt from having to file.

Laurel Simmons: Okay. All right. Many more questions here. Our short-term rentals, mid-term rentals and long-term rentals are treated the same way for purposes of this new legislation, let's say an owner of an Airbnb registered under a corp with 45% occupancy would have to pay the tax. Is that correct?

Daniel DiManno: Correct. Airbnbs don't qualify as the rent, the type of rent they're collecting doesn't qualify.

Laurel Simmons: Okay. But there's a difference between the punitive or the fees that are assessed versus the tax that you have to pay on the property.

Daniel DiManno: All right, so there's two things to consider here. There's several things to consider breaking them down. Do you need to file the return? Yes or no? If you need to file the return, are you, do you need to pay the tax? Likely, more often than not, you're not gonna have to pay the tax if you have a renter or whatever, but you have to file the return. If you don't file the return, you get penalized.

That's where you have to figure out where you fall, where the chips fall for you, because again, if you assume this doesn't apply to you and you miss the return, a $5,000 penalty for an individual, $10,000 for a corporation.

Laurel Simmons: Okay. All right. So now you talked about the U number for corporations, but is there a number for individuals? Because a lot of people don't have their properties and corporations, right?

Daniel DiManno: I believe you can file with your, as far as we know, you can file with your social insurance number.

Laurel Simmons: All right. Wow. And vacant residential lots that have no building. I'm assuming someone asked about that. They're not, if there's no building on them, then they're not don't fall under.

Daniel DiManno: You wouldn't qualify as residential.

Laurel Simmons: Okay. Good. Let me see new questions here. Oh. Yeah. What happens if we file it wrong? Cause people do make mistakes, right? Like that just happens.

Daniel DiManno: I don't know the answer because no one's filed one yet. But generally speaking, any time like amending something for an error is usually you're allowed to amend without penalty. And that goes for any information returned that the c r a collects from people. That being said, if you file it wrong, then you assess no tax owing.

Then it turns out you have to pay the 1% tax. You will certainly be penalized for interest and penalties for not calculating the tax and paying it by April 30th. You won't necessarily be penalized for misfiling or not filing, so that goes away. But again, you have to look at the penalties.
The penalties are if you go back to my slide, the penalties are listed as the greater of the tax times 5% plus 3% per month that it was outstanding, or the $5,000, $10,000. So one way or another, they're gonna penalize you if you don't file. But if you file, you shouldn't be penalized to amend.

Laurel Simmons: Alright. Okay. Here's an interesting question. If a Canadian citizen is untitled, but the beneficial owner is a Canadian corporation, do you need to file?

Daniel DiManno: They would have to file. Because he's a trustee of that property.

Laurel Simmons: Okay. Pre-construction condos, I guess it's not built yet. The answer would be no.

Daniel DiManno: Correct.It's uninhabitable.

Laurel Simmons: All right. Okay, we've got more questions. Wow. . Can we just use a CRA business number for corporations? I guess the answer to that is no.

Daniel DiManno: We actually tried that about three weeks ago and prior to filing we called the CRA r just to double check cause it was the first one that was going out the door and they stopped it.

They said, no, you need the RU number. And then we said, can you give us one? Cause like you can call the CRA as a business owner and say, I have a business. I need an HST number, I need a payroll number. They'll give it to you. Almost pretty much right on the spot. For whatever reason, RU number, I guess they don't have the manpower to deal with it. They're just pushing everyone to the, to online.

Laurel Simmons: Okay. Here's a question. If the property is owned by a husband and wife on title, but they have a joint venture agreement with a third party, all three have to file.

Daniel DiManno: All three. So who's on title? Just the husband and wife and the JV person.

Laurel Simmons: I'm not sure from the question, but if they have a, maybe they just have a joint venture agreement and they're, that person is not on title then that the joint venture. Joint ventures would not be required to.

Daniel DiManno: If they're not on title by definition they don't have to file. But then the husband and wife would have to, because they're holding it theoretically. It's not in trust, but it's like a partnership.

Laurel Simmons: Okay.

Katherine Nelson Riley: My head is just spinning from all this information. This has been awesome.

Laurel Simmons: I'm going to wrap things up now. We are going to first of all, thank you. Thank you Daniel, thank you so much for your time, your information sharing all this with us. It's really valuable information.

Daniel DiManno: My pleasure.

Laurel Simmons: It's just great. Hi everyone. I hope you really listened carefully to that. That was, there was so much information in there that my head was spinning, and I've taken notes and there's gonna be calls to our accountant, and it's just so important that you listen to this. Maybe listen to this episode more than once, right? Because there's so much critical information in there.

Katherine Nelson Riley: It's just the jumping off part for the conversation. That's right. And the questions that were coming in from the chat for those of our community that attended live. So those are also included in this podcast.

Thank you very much everybody for tuning in and listening cause this is longer than what our normal podcasts are. But we really hope that it is Worth it in order to impart the importance of having the conversation with your accountants and in order to protect you in your business of real estate investing.

Laurel Simmons: With that we will say goodbye and hey, come grow with us and customize your life.

Katherine Nelson Riley: Absolutely. And if you wanna catch the full episode from this segment, it was from our March 8th national virtual event. And you can catch the full replay with all of his slides over on our website at www.thereiteclub.com.