Fraudulent Transfer?

[AngelinaCat]

Well, think of it this way--the trustee may just end up with a white elephant that HE can't get rid of. Then your Dad might be able to wash his hands of it.

If a 2004b Exam is called, I think that your Dad would also be able to attend, especially since it is his house...

[joshuagraham]

I wonder how this could have been avoided. I guess since the house had to go back into private hands (because of insurance), that it could not stay an asset of the corporation, in which case the father would have been the party loaning money to the corporation for the house (and with a lien.) Perhaps the corporation could have recorded the loan made by the father at the clerk of court, and then when the corporation dissolved, the corporation would have sold the property back to the father (it would have needed a fair appraisal), thus showing a clear line of action with no funny business.

[Ormolu611]

I guess what I am having problems with is I could understand if the house was purchased with company funds.but it wasn't. The company had no funding of it's own. Our tax document clearly show "shareholder loan to corporationm" that is the actual language used by our accountant. The company bought houses with borrowed funds.

[LadyInTheRed]

I wonder how this could have been avoided. I guess since the house had to go back into private hands (because of insurance), that it could not stay an asset of the corporation, in which case the father would have been the party loaning money to the corporation for the house (and with a lien.) Perhaps the corporation could have recorded the loan made by the father at the clerk of court, and then when the corporation dissolved, the corporation would have sold the property back to the father (it would have needed a fair appraisal), thus showing a clear line of action with no funny business.

Yes, a properly documented loan from Dad to the corporation, with a lien recorded against the property, would have avoided the situation.