BiggerPockets

First of all - does anyone else feel like they are singing the alphabet?

I have heard the LLC or FLP is the way to go but what really does that do for me?

What are the pluses and minuses and differences between the two... [In real English not legal jargon]

I have heard its better to have the LLC in more then one persons name… [Which for me would be my husband] what's the best way to split that? [50/50 or 49/51 from a tax point of view]

Are there tax advantages to an LLC if only one of the persons listed is a US citizen and the other is not?

How do you pay "yourself and husband" without messing up your taxes?

What extra documentation do you have to have at the end of the year to file the business taxes?

And I could probably think of a million more questions… but I will stop there for now.

:oops: :oops:

As far as an LLC goes, it is a pass through entity in which the entity shows no profit or loss, rather it passes all profits/losses onto the owner's or managing partner's personal tax returns. There are no tax advantages to an LLC, only liability protection in some form. Having a great insurance policy is also another layer of protection.
As far as husband and wife, 50% each is fine. Any profits you would make in the LLC would be splut evenly onto each of your personal returns (assuimg you are filing seperately, rather than jointly). When you have two or more people owning an LLC, you need an operating agreement which should be created by your RE attorney.

A FLP is another type of entity, and may or may not fit a starting RE investment biz. That is actually a question for your CPA or tax attorney as to which entity is best for YOU and YOUR situation.
I am not an attorney or CPA and advise you to consult with one on this topic. It is very important!

Originally posted by Grof I Grofica Together In Investing Together In Life

oh and is it better to open one prior to buying the houses or can i just do that anytime?

Tough to answer that question as it depends on your specific situation and plans. Again, speak to a CPA or attorney on that as well.

Some form prior and actually purchase the property in the entities name, others buy in personal name then transfer it into the entity. I have done both.

Jon was perfect with his comment that one size doesn't fit all. And, it changes as you become wealthier and owner of more assets. It also changes as you get closer to retirement or don't have underaged kids causing you alarm.