Do LLC's Pay Inventory Taxes?
Dear List,
Someone told me today that holding rental properties in LLC's are great ways to protect one's assets..but that LLC's have an annual Federal tax of 7% on the value of the rental properties owned by the LLC.
Is this true? Surely not....
Bob
I have never heard of this tax. Perhaps "someone" was referring to a local or state tax. Perhaps "someone" could cite the authority for that statement.
I've never heard of that either. The LLC is good for real property because the appreciation of the property when sold is not taxed twice. There need to be two members within the LLC to obtain the federal flow through tax advantage.
Jungloo,
Perhaps your state requires two or more members for your LLC. My state only requires one. I believe the minimum member requirement for an LLC is state specific.[ Edited by DaveT on Date 10/09/2003 ]