So, I've gotten my real estate broker's license. I've formed LLCs for my properties in the past, but was wondering if anyone had a suggestion for an attorney who could give me advice as to whether to set up an LLC or S-Corp for my broker's license or if the E&O insurance is sufficient liability coverage.
Suggestions for attorneys?
I should have specified that this is in the Denver metro area of Colorado. Thanks!
You won't be able to be licensed as an LLC until you get past your first two years, so you'll want to see if you can operate under one or how that coordinates with filing taxes as one. E&O is sufficient to a point, and is only designed to cover your activies as a broker. If you are going to sell any deals you have ownership in you'll need additional insurance, or you'll need E&O from a provider who covers that AND you'll have to follow their strict guidelines for coverage. CRES has been the closest I've found. A good GL policy might augment that sufficiently.
Thanks Micki! I will be covered for my own deals through my E&O.
@Adam Kroll I am no attorney nor accountant. What I do is have all my real estate commissions paid to my S-Corp. Then my corp pays me a salary & quarterly dividends. As you will find out, agents have a lot of expenses and my corp pays those.
Thanks Matt! The S-corp was my thought for the tax reasons you have outlined. Since I am an investor with several LLCs owning property, an umbrella S-corp to own all of the LLCs may be the best way to allocate income to the most advantageous taxable income category.
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