Rental Property Investor · New York, NY · Member since 2018 · 64 posts · 7 votes
Should I turn my second home using as STR in Fort Lauderdale into a LLC? If I should, where do I start the process in Fort Lauderdale? How long does it take? and how much will it cost me? What are the pro and con of running it as LLC?
Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
7y
@Adam Harper do you want tax benefits or asset protection? that you big decision. An Asset Protection setup is tax neutral, but may give secondary tax benefits. But that is not the goal of AP. Talk to your CPA and AP Attorney. Or get one. DO NOT set up an LLC and operating agreement on your own. You will have no idea what clauses to put in and words to use in the initial filing and articles of incorporation to even start the process. Standard language is not used for AP. And the operating agreement has to be done correct to maintain the separation.
For AP purposes, set up an LLC or Series LLC if looking to keep investing. And transfer your property into your LLC/SLLC via a legal trust that is a member of the LLC. Again, an attorney is needed to do this properly and smoothly for you. The timing is not very long, We do this for clients nationwide. You can set up your LLC or SLLC in a AP strong state like TX, NV, DE. then invest wherever you want in whatever state you want. Then after you purchase the asset, you have your attorney quickly and easily transfer the property for you.
The cost of this is not much at all. For example, a simple Series LLC with anamynity trust would run around $3k or less.
I would do it. It costs less than $500 to start an LLC and about $1,500 annual for LLC tax returns.
It should save you a good amount of coin in the long run and provide an additional layer of liability protection. I have a great CPA in Davie. PM me if you need more info.
Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
7y
If you create a single member LLC, you won't need a CPA as it is a disregarded tax entity and you will report it on your regular 1040.
However, since Olmstead vs FTC, single member LLC are not very good for asset protection anymore in Florida (charging order is not the sole remedy). Also in Florida, LLC are not providing anonymity.
You could improve the anonymity and charging order protection of your single member Florida LLC, by having it owned by a Wyoming LLC. This one getting all the charging order protection and anonymity.
Accountant · Fort Lauderdale, FL · Member since 2013 · 1k+ posts · 753 votes
7y
Speak to a CPA about that, but depending on your specific facts and circumstances, it may not be necessary. Keep in mind having an LLC does not afford you additional tax deductions. That is a common misconception. If you are not worried about asset and liability protection, then you may just be fine.
Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
7y
@Adam Harper do you want tax benefits or asset protection? that you big decision. An Asset Protection setup is tax neutral, but may give secondary tax benefits. But that is not the goal of AP. Talk to your CPA and AP Attorney. Or get one. DO NOT set up an LLC and operating agreement on your own. You will have no idea what clauses to put in and words to use in the initial filing and articles of incorporation to even start the process. Standard language is not used for AP. And the operating agreement has to be done correct to maintain the separation.
For AP purposes, set up an LLC or Series LLC if looking to keep investing. And transfer your property into your LLC/SLLC via a legal trust that is a member of the LLC. Again, an attorney is needed to do this properly and smoothly for you. The timing is not very long, We do this for clients nationwide. You can set up your LLC or SLLC in a AP strong state like TX, NV, DE. then invest wherever you want in whatever state you want. Then after you purchase the asset, you have your attorney quickly and easily transfer the property for you.
The cost of this is not much at all. For example, a simple Series LLC with anamynity trust would run around $3k or less.