LLC
I'm a www.beginner.I keep hearing about LLC's(limited liability corp.)Should I start one before my first investment www.purchase.I'm anxious to get started,and want to make as little mistakes as possible.
I'm a www.beginner.I keep hearing about LLC's(limited liability corp.)Should I start one before my first investment www.purchase.I'm anxious to get started,and want to make as little mistakes as possible.
With all due respect, that is a question for your Accountant!
Relax. Anybody can open a new LLC in under an hour on the internet, in lots of states.
So find your RE deal then inc. yourself as you want.
And in lieu of talking to any accountant, go to the library and get some books on corporations and LLCs and you'll probably learn more than most accountants ever know about les corps' raison's d'etre.
Also if you'll pick up and read through two or three issues of "INC" Magaizine, and their ads, you'll learn a very great deal about uses and operations of corps, LLCs.
Thanks for the www.replies.I guess reading and talking to an accountant would be the way to go?Any other suggestions would be appreciated.
If you're concerned about asset protection, find an attorney experienced in the areas of tax law, business entities and asset protection. Although I certainly agree with the advice to hire a CPA, and to read up on things, it's important in this area to consult an attorney. Yes, you can always do things all by yourself, but that's not always wise. If you're just starting out, owning a residential property in your own name is not much of a risk. You'll also want to clarify exactly what kinds of risk you're concerned with before you proceed to set up any plan. That will affect what kinds of strategies to use. Your overall tax situation also affects the choice of entity you use to hold the property.
Tbouman,
After the wild fires, are the mountains green again?
Frank
I am also a beginner in REI and I wanted to know about the pros and cons w/ re to taxation for LLCs. I have heard that the investor/landlord is more protected in an LLC, but how does this differ from having liability insurance on a property?
Well, today the mountains are white thanks to a winter storm. They're still beautiful, although many areas are still charred.
Both the LLC and the LP provide pass-through taxation if that's what you want and need. The LLC is a newer entity with less case law to back it up. The LP is more traditional. One disadvantage of the LP for many people is that the general partner has full liability. In Arizona, and some other states, however, you can also get limited liability for the general partner. I'd generally recommend the LLC, but watch out for single member LLCs. There is some case law that puts their protection into question. It's better to come up with more than 1 member - even better yet if it's for a legitimate business purpose.
Tbouman,
Summerhaven, AZ Truly is Gods Country!
Frank