BiggerPockets

Hey guys, been setting up my LLC this week. Want to open a business account in the LLC's name. My understanding is I need to get a tax number. Do I get this from the IRS or from the state of North Carolina? Anything else I have to do before I start officially using this account? Thanks.

thanks...that was easy...there's gotta be something else i have to do??

well let me ask you guys this...the irs website was asking me all sorts of questions about how i would file and if i wanted to be taxed like a S corp...this is over my head..i rent a few properties..what do you guys think?? thanks

I've always had to have the EIN of the entity to open a bank account. Assuming its just pass-thru, and single member, you don't have to file a return.

Bryan, its asking if you want to be taxed as a corp, not an s-corp. The answer is no for what you're doing.

If you want better answers, you should have a chat with your CPA and lawyer. LLC has no effect on taxes, and I doubt very much you want any effect. LLCs do give some asset protection.

LLCs are *normally* disregarded by the IRS as tax entities, but the owner of an LLC can elect to have the business taxed just like any other corporate entity (partnership, sole prop, s-corp, c-corp, etc).

There may be some tax advantages to treating your LLC like another type of entity for tax purposes, depending on the type of business the LLC does, the specific amount of income that's generated, etc.

For example, the LLC I use to flip houses is taxed as an S-Corp, and that election allows me to save some money each year because S-Corps are allowed to pay dividends, which are exempt from FICA taxes...if I hadn't elected to have my LLC taxed as an S-Corp, all income (up to the limit) would be subject to FICA taxes when flowing through to my personal returns...

That said, as Jon pointed out, talk to your CPA before relying on any information here...

Again, if you want to do this right, you MUST speak with your CPA and your lawyer. This is not really a DIY project.

Bill Bronchick's "Wealth Protection Secrets of a Millionaire Real Estate Investor" is a pretty good intro.

"Piercing the corporate veil" is much more complex than just the money. To put the money into your LLC, you would purchase units in the LLC. Document the money going in. But just doing that won't necessarily protect you. You're still the manager, and just like corporate officiers can still be personally liable for their decisions (think Joe Naccio, Ken Lay, Jeff Skilling, and many, many others), you can still end up being personally liable for actions you take on the part of your company.

I go and hijack this topic :), incorporate as a LLC or a corporation in the US is not the problem for me as foreigner.
But now I found an banana skin, for the rent collection and for the payments for utilities I need a bank account.
Now its drolly, to obtain a EIN from the IRS I need a SSN, but I dont have these number, so I have a big problem now. I cannot open any bank account in the US without these EIN. I will close in Cleveland January 2010, what should I do?

-Uwe

Bryan,

Thanks for the advice, I incorporate in Ohio yes. Only the banks says yes for an international bank account and in my case its no bank. They want all the EIN, thats a part of the patriots act.

Thanks for good wishes. With the "how much work" you mean any repairs on the building? There are no repairs, the house is fully occupied (6 apts and 2 storefronts) and need no maintenance today.

-Uwe

Yes, at closing I fly to Cleveland and I have the right to cancel (get my EMD back) when the promised quality is wrong. I have send an house inspector to the propertie, 2 minor problems (seller fix this) and he maked a video for me. I become a new Certificate of Occupy from the Housing City Department.
The house was until May 2007 mismanaged and have a occupancy of under 50%. The owner gaves in year 2002 a owner financing to a friend of him, this was an fault.
Since August 2007 the owner have control over the building and his property manager (owner owns 5 properties in Cleveland) filled the units and make all repairs. The average occupancy is now 97% this year. Last year 94%, 2007 62%.
I have no fear, I´m a property manager in Germany I know the most, so I look in Cleveland for a other rent-to-own multifamily propertie to increase the units.

-Uwe

Bryan,

Don´t found a right solution yet, only I know now, a EIN is linked for a Livetime on a company.
So its possible I think I can find any person in Ohio, who fund the Corp. obtain the EIN by IRS and sell then the company to me. So I have a EIN then. But I don´t know its legal.

Long distance is not the problem if you have the right men, I work here in Germany for a english company with 254 units in my town. The company trust us and we make good work. I overtake the property manager in Cleveland and I see in the P&L, there gaves no problems with him last 2 years.

-Uwe