DEAR BOB: Our driveway is very close to our neighbor's property. He maintains that the property line runs down the middle of our driveway and he has threatened to put up a fence to prevent our use of the driveway. What can we do to prevent this? George T., Washington.
DEAR GEORGE: See your attorney. He will probably suggest that you have a survey made to find out the true boundary location. Even if the boundary is in the middle of the driveway, you may have acquired a prescriptive easement for its continued use. Act fast before your neighbor does.
DEAR BOB: Because of rent control.I am afraid to invest in any more apartment houses (I own several). I am considering investing in commercial or industrial property instead. Can you suggest a book I could read before I buy? Mr. B.H., Washington.
DEAR MR. B.H.: There is a superb book by Weldon Girard called Profit Opportunities in Commercial and Industrial Real Estate, just published by Prentice-Hall. Your local bookstore can probably order a copy for you. In addition, check with your community college or university to see if they offer a course, as many do, on commercial and investment property.
DEAR BOB: Please give a summary of the installment sale rules for selling property. Also, do I understand that if we sell our home on an installment sale we still pay tax on the profit at the low, long-term capital gains rates even though it is spread out in the future years that the buyer pays us? Otto P., Laurel.
DEAR OTTO: Yes, you understand installment sales correctly. To qualify, you can't receive more than 30 percent of the gross sales price in the year of the sale.
Sources of the money counting toward the 30 percent limit include (1) the buyer's cash down payment, (2) buyer's principal (but not interest) payments to you on the installment sale sale mortgage you take back, and (3) an excess mortgage (when the buyer takes over payments on an existing mortgage which exceeds your adjusted cost basis). Your tax advisor can explain further.
DEAR BOB: If I buy furniture and appliances for my apartment house, is it true that I can deduct a 20 percent bonus depreciation plus a 10 percent investment tax credit? Conrad C., Washington.
DEAR CONRAD: No. The 10 percent investment tax credit does not apply to apartment houses. It only applies to equipment purchased for use in a business with the limited exception of certain farm buildings used to raise plants or animals.
But the 20 percent first-year bonus depreciation does not apply to new or used personal property purchased for use in your realty investments. The property must have a remaining useful life of at least six years. The maximum "bonus" depreciation on a single tax return is $2,000 and the maximum for a joint return is $4,000. Ask your tax advisor for full details.
DEAR BOB: We plan to sell our home this summer when our new house is completed. My husband says we should let the buyer paint it, but I say we should paint it to make it look better. The realtor says it doesn't matter as our local market is so active almost any house sells within a month. Should we paint? Linda W., Chevy Chase.
DEAR LINDA: Yes. Paint is the most profitable improvement you can make. For a minimal cost you can make your home stand out from other homes for sale. A few hundred dollars spent on paint, inside and outside, often brings thousands of extra dollars on the sales price.
DEAR BOB: I am a real estate broker. Is it true that I must write up and present all offers on a property listed with me even if I know the seller will reject the offer? Hans H., Washington.
DEAR HANS: Yes.As an agent, you have a fiduciary duty to your principal, the seller, to present all offers, no matter how ridiculous."Stupid" offers often develop into sales after back-abd-forth counteroffers and negotiations. Your primary duty is to your seller. Never do anything that is contrary to your seller's best interests.
DEAR BOB: Is it true that if I sell my house on an installment sale I must charge at least 6 percent interest? I would prefer to sell for a high sales price with no interest for the buyer on the mortgage. Wally W., Falls Church.
DEAR WALLY: If you don't charge at least 6 percent interest, the IRS can impute interest at 7 percent on all payments received. Ask your tax advisor for more information.
The Bruss report "How to Avoid Tax on Up to $100,000 of Your Home Sale Profit" is available for 25 cents plus a self-addressed STAMPED enveloped sent to Robert J. Bruss, P.O. Box 6710, San Francisco 94101.