Quick liability question

[Daniel Dudley]

He needs cash because his credit with suppliers is not good.

Then you should buy it, and there should be no mark up. This is a red flag.

Maybe that's not clear enough. IF he can't handle the responsibility of paying for materials, THEN he can't handle the awesome responsibility of taking YOUR cash and paying for materials.

In my business, I give estimates, but I pay by the week, and I bill by the week. If you are dealing in cash, you should never be out of pocket. At most, he should have a one week deposit, but in reality, you should only pay per week for the work done the previous week, and I don't mean 5,000 dollars for 20 hours labor.

You have money for this project. If you are paying cash, it should work out to be a very good deal for you, otherwise you should just get a legitimate contractor. Legitimate means does estimates, has insurance, pays taxes, takes checks.

How are you going to prove anything if you give a guy 20,000 in cash and he disappears for 2 months ? That is a really common scenario, even with guys who have been on the straight and narrow for years. Once you get past a certain sum of money, what do they need you for ?

 

[Architorture]

I sold a piece of property for $35K. the buyer paid in cash. I depsoited it and 3 days later the IRS was on my doorstep wanting to know where the $35K came from? Dont think they aren't looking at deposits. They asked me where it came from. I showed them the sale papers and they left for his place next. Cash aint always king nowdays.

receiving $50k is a lot different than spending it.

i can go write a check to a stranger on the street for $50k and it has pretty much zero tax consequences for me.

it sounds more like your deposit set off some kind of red flags at your bank given your previous deposit history. i frequently purchase and sell properties which causes me to withdraw or deposit substantial sums of money in my bank account. never have i had anyone from the IRS come to check on the matter.

 

[Architorture]

Should have split it in to under 10K amounts and split it up over a number of weeks.

and that right there is a felony.