Hello all! Hope some of you can clear up a few questions I have. Here it goes:
My father owns a vacation home in Ireland that sits unoccupied for 345 days a year. I am proposing to him that he let me Airbnb out the home so that it generates some passive income.
I intend on taking out short-term rental insurance on the property to protect my father from any liability, but I want to take it a step further and set up an LLC so that his assets (including his vacation home) are completely protected in the event that a guest gets injured and tries to sue. I also want to be able to write off on my taxes any business expenses I will have.
My questions are:
1. Can I operate an Airbnb in Ireland with an LLC registered in the US? Is there any reason I might want to register the LLC in Ireland instead? Do I need to register the LLC in both the US and Ireland? My home state is New York.
2. Can I be the sole owner of the LLC if my father owns the property?
3. If I operate the property under an LLC, will my father, and his vacation home, in fact be protected from any liability being that the title to the property is in his name? Are there any situations he would not be protected?
I understand that the laws are different in every country and that I need to do some research into Ireland’s real estate and business laws, but any thoughts, advice, or ideas would be much appreciated.
Thanks ahead of time for all of your help! Roll BP Community!
You should really talk to a real estate lawyer in Ireland. In the US the property would need to be owned by the LLC to have the protection you seem to be looking for. The British legal system is significantly different than ours. So I can't begin to guess how it would work over there.
Agree with the previous poster, don't try to DIY asset protection and legal entity structuring across international borders...
Reach out to an Irish professional familiar with Irish legal entity types and client types such as yours (i.e. foreigners investing in Irish AirBnBs).
Then, interview and retain an Irish tax professional and a US tax professional. You and/or your father's tax situation is about to get a lot more complicated, and compliance isn't going to be cheap.
Thank you @Phillip Cook. I definitely plan on that.
From browsing for information on sites like Investopedia, the IRS allows you to take tax credits for any amount of rental income tax paid to the foreign country, capped at the amount that is owed to the IRS. But yes, I will definitely consult with a tax professional in Ireland and the US. Thank you @Eamonn McElroy.
In Ireland, they likely have an entity that is named different than an LLC.
Your US tax return will get complicated as you will now be required to file many foreign related forms...failure to miss the foreign information forms can result in large penalties...
Thank you @Basit Siddiqi
@John Foley can't help on the legal side, but I can say that setting up an account for a US LLC at Bank of Ireland was not terribly difficult. Took some advance work (document gathering) and then ultimately a visit to a branch in Ireland, but it's been hands off since then. All online banking. The bank might even offer some advice with regards to what you're looking to do. The branch in Cork where I opened my account was actually a quasi-business incubator space. Good luck!
Thank you! Appreciate the knowledge @Dan Schwartz
@Dan Schwartz , was the LLC you opened for real estate purposes?
@John Foley no, it was not. And to be clear, it was a bank account for a US-based LLC to facilitate payments I make to vendors in Ireland and the euro zone (not RE-related). I have not opened/started an Irish company.