Having a merchant account
Sep 20, 2011, 11:04 am
#16
Join Date: Oct 2010
Location: IND
Programs: SPG Plat, WN CP, Many Others
Posts: 538
What about if you have a sale-leaseback arrangement with all the various legal docs; for example, I'm considering purchasing the house my brother lives in today, then renting it back to him.
He gets to keep the place he's at, I get fairly steady rental income, a tax deduction, and, god willing, home price appreciation. Plus when he moves out I get to rent it at a higher rate to someone else.
Would be really helpful to be able to use credit cards to pay the rent to my LLC (which is legitimately set up already to own and rent properties), which will take the payment as rent and pay out for mortgage / taxes / interest.
Would a merchant account get it's panties in a bunch for that?
I'd like to be able to take credit card payments for my rentals anyway instead of paypal / ach (or god forbid, checks in the mail) as I do today.
Any thoughts?
He gets to keep the place he's at, I get fairly steady rental income, a tax deduction, and, god willing, home price appreciation. Plus when he moves out I get to rent it at a higher rate to someone else.
Would be really helpful to be able to use credit cards to pay the rent to my LLC (which is legitimately set up already to own and rent properties), which will take the payment as rent and pay out for mortgage / taxes / interest.
Would a merchant account get it's panties in a bunch for that?
I'd like to be able to take credit card payments for my rentals anyway instead of paypal / ach (or god forbid, checks in the mail) as I do today.
Any thoughts?
Sep 20, 2011, 3:23 pm
#17
In memoriam
Join Date: Aug 2005
Location: Near Jacksonville FL
Posts: 3,987
One thing to remember about merchant accounts starting this year. If you pass more than $20k through them and have at least 200 transactions - everything will be reported to the IRS. Robyn
Sep 20, 2011, 7:52 pm
#18
Suspended
Join Date: May 2010
Posts: 2,998
Yes, no. Expensive miles and I've only done it in a situation where I was reaching a deadline and a points bonus was on the line.
Sep 21, 2011, 12:43 am
#19
Join Date: Jan 2003
Location: Fairfield County, CT USA
Programs: AA PLT+2MM / DL DM+1MM / A3 *G / Fairmont LT Plat / Ritz Gold / SPG Gold
Posts: 4,077
But if they're really wash transactions, while the cc processor might get upset, it would be extremely difficult for the service to successfully claim these payments were income.
Sep 21, 2011, 7:35 am
#20
Join Date: May 2011
Location: ORD
Programs: AA LTG, Marriott LTP. 50% Delta LTS, Working on Hyatt LTD
Posts: 676
Between this and paying dealerships to use your credit card and having your wife paypal you money you sure love to give away your bottom line (fees) to these credit card companies dont you?
I fly long business class international flights out of pocket; anything under about 5 cpm is worth it to me (though on average i'm at 1.9 cpm).
Sep 21, 2011, 8:13 am
#21
Join Date: Jan 2008
Location: BWI (Annapolis) & PWM (Bailey Island)
Programs: AA LT Gold (MM), WN A-List, Fairmont L/T Plat, HH Diamond
Posts: 884
I just closed an account w/ authorize.net/i-payment. They withhold your cash and reconciliation is a PITA. Not to mention fees, more fees, fees on the fees, etc. My recommendation: F that. Save your time & energy. You get sent to the risk management at the blink of an eye (I got sent twice for legit transactions), and they work bankers hours as well. 2 people in the department, and both are always on vacation. If you like sitting on upside down bar stools, then definitely open up a merchant account.
Sep 21, 2011, 3:41 pm
#22
In memoriam
Join Date: Aug 2005
Location: Near Jacksonville FL
Posts: 3,987
. FWIW - I'm not saying anyone would have an audit - just pointing out recent changes in the tax laws. Robyn