I thought we'd start an FAQ for people interested in learning about LLCs. We'll share important posts and blog articles about these structures here. If there is an article or thread you think worth adding, please post it here.
Frequently Asked Questions / Articles:
- Series LLCs and Real Estate Investing: A Primer
- When to form an LLC
- LLC or LLP? Which Entity is Best to Protect my Rentals?
This topic was about when to form the LLC and gives some insight into the liability protection (or lack there of as the case may be)
Happy Investing! :lol:
This topic covered whether you should use a Limited Partnership or LLC for your long term holds.
This topic gives an example of forming an LLC vs. an S-corp for someone who flips houses...
Greg can you confirm that this example is true?
I have been trying to decide weather an LLC or s-corp would be better for a part-time rehab investor (fix and flip)
I agree with a majority of the post. It is better to flip in an entity taxed as a corporation.
The article doesn't address the fact that the LLC can elect to be taxed as an "S" corporation and you have the same tax result through the LLC as you would in a tradition "S" corporation.
One issue I disagree with in the article is the percentage of earned income that needs to be claimed. The IRS is cracking down hard on entities taxed on "S" corporations where the salary is not reasonable. I doubt that the IRS would classify only 20-30% of income as salary as reasonable. A more realistic figure is 70-80% as salary and 20-30% as a passive distribution/dividend.
I hear this talked about a lot here on BP about having an LLC elect to be taxed as an S corp.
The truth is, that is ONLY necessary if your gross receipts are above and beyond your state limit. In other words, in CA, unless your Gross receipts are $1 million or more, there is no additional tax, above and beyond that there is and to avopid it, the S corp is elected. In TX, I believe that amount is only $300k.
Check with your state and your RE tax attorney. It is most important rather thna relying on public forum opinion on legal & tax matters. I am sure Greg would offer the same advice.
Absolutely, your local professional is going to the know the ins and the outs of the your state.
this was a great idea to consolidate all the best of the best in regards to LLC FAQ and having links direct to the specific threads!
Lets get the rest of the best here so all who want to learn this topic need only come to this free thread!
Absolutely. I'd like to do the same across topics on the site, but we'll take it one piece at a time.
Is/are there also a book(s) that are recommended that could be added to this post?
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