My spouse and I are in the process of getting and EIN number for our LLC. Which is best the Single Member LLC or the Multi Member LLC to choose on the IRS website?
We are getting a rental property and are in this for the long haul together. We are not planning on having anyone else in the LLC
By the way when I click single member on the IRS website at the end before we are done it only shows my name...
By the way we live in Wisconsin
@Kristin Whitfield you don't need an LLC to buy a rental property, especially when you get started. Managing your rentals properly is the most important thing, followed by an additional umbrella policy. The only thing an LLC can do is contain the potential damage from a lawsuit to what the LLC owns and thus keeping assets you own outside of the LLC shielded. This comes into play with increasing net worth - if your net worth starts to exceed your umbrella policies limit you make a much more attractive target, than someone who has $17.000 equity in a condo. In any case if you decide to get started with an LLC right away (nothing wrong with that either) then I suggest you spend a little bit of money and have it set up correctley by a real estate attorney. He will also be able to tell you on how to operate the LLC propperly (transfer title of the property, sign contracts, operate independednt bank accounts etc) - if you don't do these things correctley you can potentially make the LLC comletley useless and offering no asset protection at all.
I am not a lawyer and this is not legal advise, just my opinion.
Many single member LLCs are broken and offer no protection. Multi member LLCs have not been broken, although lawyers have tried I believe.
All rentals need to be in LLCs. No idea what the advice above is about. Insurance stands behind you, not in front. Insurance is not a shield, it's a last line of defense.
Marcus is correct and the discussion of all rentals having to be in an LLC has already been hammered out here with attorneys posting. The thread title had "absolutely" in it, it's about a week old.
James is correct in saying insurance stands behind you, good management is the key factor. If your management and ability to resolve problems isn't sufficient then insurance kicks in. Suit must be filed for your insurance company to get in the battle, otherwise it's on you to settle things. I've owned properties personally and in corporate structures and never lost a case anyway. Depends on where you are, but the personal asset protection is way over blown for single family homes. A 20 unit apartment building, yes, or in a partnership, yes. There needs to be a business reason to form an entity.
A single member is often disqualified, this is also state specific. Multi-member LLCs having unrelated parties as members will stand much better, having a husband and wife is still pretty much singular ownership.
As to the OP's question, who was named as the managing member, that may be why your name pops up.
Marcus probably read the thread I mentioned. **** :)
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