mike_mn
04-20-2005, 02:12 PM
I am wondering how you all structure you investing entities.
For example, I am begining a new structure. Before, I have always owned my rentals personally. I am amassing some equity and want to protect it.
This is the structure I came up with. An LLC for Marketing of we buy homes and tenant buyers. This name goes on the purchase agreement, but PA is assigned to 1 or more other LLC's for benificial interest in the land trusts used to hold the property and a C corp for Property Management.
I could use some advice on who to use as the trustee of the land trust. I dont particularily want to use someone other than me, but if it is best, then I will have to.
I will also likely have an s corp if I start flipping more stuff, as beneficial interest in the land trust, since profits are passed through instead of being considered income.
The reason I chose this structure is that I need a company that I use as the name of my business, hence the marketing LLC. However, I dont want that company owning anything since, my liability is greater due to knowledge of the business existance. This company is reported on schdule c for taxes and its income is recived from the property LLCs to offset marketing costs canceling out each other. The property LLCs for holding property. They are good for holding because you just report on schedule e for taxes, no extra tax return. To simplify this one more step, I may start a holding company LLC that owns other LLCs holding property, then only 1 schedule e.
The reason for the c corp on the managment company. It is owned by someone other than me, just so happens to have the same last and and lives with me. Since I am an employee, the company has a policy to pay for all medical/dental/vision premiums and fees for employees, including family plans. i draw a small salary as a property manager and the company pays for my family medical expenses, and ends up with little or no profit so little/no double taxation.
The reason for the future s corp is to hold property that is flipped. As many of you know the government has a dealer status on flippers. That means if buy in an LLC or personally, and sell right away, they want you to pay "income" tax on the profits not capital gains tax. With the s corp, it is in the business of flipping and you can choose how much is wage(income) and how much is pass through profit.
Anyone else willing to share there structure and why. This is a new concept to me and I would enjoy hearing other ideas and business structures. I got some of the ideas from a RE Attorney and others from reading a lot about entities and tax books.
I guess I should add the disclaimer that i am not an attorney and am not giving tax or legal advice.
Mike
For example, I am begining a new structure. Before, I have always owned my rentals personally. I am amassing some equity and want to protect it.
This is the structure I came up with. An LLC for Marketing of we buy homes and tenant buyers. This name goes on the purchase agreement, but PA is assigned to 1 or more other LLC's for benificial interest in the land trusts used to hold the property and a C corp for Property Management.
I could use some advice on who to use as the trustee of the land trust. I dont particularily want to use someone other than me, but if it is best, then I will have to.
I will also likely have an s corp if I start flipping more stuff, as beneficial interest in the land trust, since profits are passed through instead of being considered income.
The reason I chose this structure is that I need a company that I use as the name of my business, hence the marketing LLC. However, I dont want that company owning anything since, my liability is greater due to knowledge of the business existance. This company is reported on schdule c for taxes and its income is recived from the property LLCs to offset marketing costs canceling out each other. The property LLCs for holding property. They are good for holding because you just report on schedule e for taxes, no extra tax return. To simplify this one more step, I may start a holding company LLC that owns other LLCs holding property, then only 1 schedule e.
The reason for the c corp on the managment company. It is owned by someone other than me, just so happens to have the same last and and lives with me. Since I am an employee, the company has a policy to pay for all medical/dental/vision premiums and fees for employees, including family plans. i draw a small salary as a property manager and the company pays for my family medical expenses, and ends up with little or no profit so little/no double taxation.
The reason for the future s corp is to hold property that is flipped. As many of you know the government has a dealer status on flippers. That means if buy in an LLC or personally, and sell right away, they want you to pay "income" tax on the profits not capital gains tax. With the s corp, it is in the business of flipping and you can choose how much is wage(income) and how much is pass through profit.
Anyone else willing to share there structure and why. This is a new concept to me and I would enjoy hearing other ideas and business structures. I got some of the ideas from a RE Attorney and others from reading a lot about entities and tax books.
I guess I should add the disclaimer that i am not an attorney and am not giving tax or legal advice.
Mike