Would This Plan Work??

Question

Hi Guys,

I am from the UK and am wanting to start a property portfolio in the USA. My question to you all is......................."Could i create a Series LLC in Delaware for example and own property in GA?"

If i could do this, what tax implications would this impose on my business and if this is not the correct way of conducting business, I would like to hear how i would go about making sure i am doing everything 100% legit.

My goal is to setup my LLC first and then look into purchasing property, however, i have no preference of US State as my 1st property and my 2nd property might be in different states and so on. My ambition is collate as much property as i can hence this email and the request for help from fellow investors.

Hope to hear from you guys soon. Take care and have a great day!

Account Closed · Answer

Account Closed You should never have double tax unless you pay dividends - which you should not. There are plenty of other ways to clear out earnings pretax instead. There may at times be tax to yourself from Directors fees and Consulting fees - and there are very generous tax deductions and other benefits with a C. Do the research instead of dismissing it!

Also Asset Protection is a must and a C does it better than LLCs.

Account Closed · Answer

Guys, i really appreciate the information and advice, so shall i go for a Series LLC and form additional LLC under my master LLC?

Account Closed · Answer

Many thanks Dee!!

Ronald Rohde · Answer

I agree with the first part, but there is not a strict necessity to have a C corp, double taxation for what benefit?

LLC hold co in DE with individual state LLCs where he owns property.

Account Closed · Answer

You should have a separate LLC to hold each property. Having one in each state you own the properties would avoid possible adverse consequences as to whether you are regarded as doing business in the state. However technically you may escape that interpretation when you only hold property - so going for Delaware might work - but consult an attorney in each state to see their take on it as interpretations vary.

You will need a C Corp. structured above the LLCs - which can be paid management and other fees - and for tax purposes Delaware is fine.

Paul Hitchings · Answer

Also food for thought, in the U.S., attorney's are licensed to practice by individual states, at least as far as state laws.  So don't expect a Delaware attorney to advise you about owning property in Texas, unless it is through a Delaware company.  Also, sometimes ownership differences have to do with taxes as well as legal entity formation, so consider consulting either some tax attorneys or accountants in the states you want to own property in, to ensure that your desired formation has beneficial tax ramifications.