FEIN needed for a LLC (for a buy and hold land deal) ?

Question

Hi,

I am considering to buy a land deal in Nevada with other friends of mine and we are looking to set up a multi-member LLC in the state of Nevada for this. The LLC will only hold the vacant land for the moment and not have any employees.

Reoccuring expenses for the LLC would only be paying the property taxes as far as I understand it and that´s it.

My questions:

-Is there any need or advantage to apply for a FEIN for the LLC ?

-I know I cannot open a bank account for the LLC without a FEIN....but I might as well just pay the property taxes via my own personal account I guess?

-Would we need to file tax returns for the LLC if we were to obtain a FEIN, even if there was no generated income, since it will only be a buy and hold deal?

-How do the property taxes get deducted if we were not applying for a FEIN?

Thanks to everyone in advance

Marco

Basit Siddiqi · Answer

@Marco TrimbornThe LLC is required to apply for an EIN.That will be one of the first steps.The partners will contribute money into an LLC bank account.The land will be purchased with the money in the LLC bank account.You need an EIN to give to the bank to open the bank account.The tax return that is filed will also require the EIN.Best of luck

John Duston · Answer

Hi Marco,

Answers to your questions:

-Is there any need or advantage to apply for a FEIN for the LLC ? Yes, you'll need an EIN for taxes. Its very easy to apply for with SS-4.

-I know I cannot open a bank account for the LLC without a FEIN....but I might as well just pay the property taxes via my own personal account I guess? See above. Having an LLC business bank account also makes accounting easier.

-Would we need to file tax returns for the LLC if we were to obtain a FEIN, even if there was no generated income, since it will only be a buy and hold deal? Yes, it will primary an informational return but you sill have to file.

-How do the property taxes get deducted if we were not applying for a FEIN? See above.

PS I'd recommend getting a lawyer to write the LLC agreement with you and your friends in the case that there are disagreements or someone's situation changes.

Joe Schmitt · Answer

@Marco Trimborn

Not an attorney or CPA, not professional advice…

The primary purpose of an LLC is to protect your personal assets in case of a suit or judgment.

That said, if you are commingling funds (paying business expenses from a personal account or vice versa) then your LLC will not hold much water.

My advice would be to start an LLC, get an EIN, and open a separate bank account for your business.

FEIN needed for a LLC (for a buy and hold land deal) ?

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