Help - Setup my Series LLC and have 1 property...

[Robert K.]

Hello All,

I paid a real estate attorney to set up a Texas Series LLC for my real estate rental business. I am treating the main LLC as the parent/holding company and have placed one property that is paid for in one of the series (or cells). I had the attorney set up 2 EINs, one for the parent and one for the cell:

1- EIN #1 for the parent was set up with my business partner and me as the members

2 - EIN #2 was set up for the cell but he also set it up with my business partner and me as the members

EIN #1 was setup just fine. EIN #2 is where I am having issues; I had hoped that a separate EIN would further establish the series' independence from the management/holding/parent company but, with my partner and I as opposed to the parent listed as members, we now have to file a separate tax return for the series when I wanted to treat it as a disregarded entity for federal tax purposes and just file one return for the parent.

Had the attorney set up the series with the parent as the only member in the series, the cell would automatically qualify to be treated as a disregarded entity. My attorney, however, is telling me that naming the parent as the sole member diminishes the asset protection argument of a series since we want to do as much as we can to distiniguish the two entities, not tie them together.

Could someone advise on how things are normally set up in this case:

1 - Do we need 2 EIN's with us being listed as members of the parent only and the parent being listed as the sole member of the cell?

2- Are we complicating it too much and do we just want to deactivate the EIN for the cell and just file under the parent?

Please note that cell only holds the deed to the property but all the accounting records and bank account are under the parent's name with separate records