Strategy for structuring business to minimize taxes and liability
Hi.
Last night at a dinner party I found myself in a conversation with an entrepreneur about taxes, corporate veils, etc. He asked me how my rental properties were structured and was shocked to discover that I personally own my properties with no LLC or corporation as a middleman.
When I first started investing in rental property I had limited assets, so insulating myself from liability was not high on my list of priorities. As I acquire more and more assets I become increasingly interested in insulating myself from unnecessary liability.
I own several rental homes with my father. These are all owned outright.
I own several more rental homes with my soon to be wife. Some are mortgaged, some are owned outright.
I was considering starting an LLC with my father and quitclaiming our properties to the LLC.
I was considering starting 2 more LLCs with my wife. The first LLC would hold the rentals that we own outright and any rentals we acquire in the future. The 2nd LLC would be a property management LLC (I self-manage) that manages the houses owned outright and the mortgaged houses that cannot be held by an LLC.
Does this structuring make sense? Are there any issues that I am not considering?