All Forum Posts by: Mike S.

Using LLC (partnership or disregarded entity) is usually tax neutral. in fact they don't pay tax at all, their members do. It also adds some costs (registration, annual report, informational tax return if any, registered agent ...).

They are often used mainly for liability protection.

There are other setups using C and S corp entities (including LLCs taxed as such) that offer tax and fringe benefit, but usually they are not holding real estate asset directly.

WY is one of the states where LLC have good anonymity (like Nevada and New Mexico). Good luck trying to find who is behind it...

However, if you just want to contact them, their mailing address is public. It could be the registered agent acting as a CMRA.  But if you mail a letter to the address on file with the registry, it will be forwarded to the member and/or manager.

In my view, one of the pillar is also equity stripping where you diminish the value of the asset by attaching liens/notes on them from another third party or entity.

my understanding is that either the trustee can pay the tax on behalf of the beneficiary, or the beneficiary can pay himself.

I don't know why the grantor would be responsible for taxes. The beneficiary should be as it is the one receiving the benefit. It is not like a living trust, where the grantor and beneficiary are the same while you are alive.

My understanding is you can either use the Land Trust or the beneficiary as the entity receiving the rent and paying the taxes. For the insurance however, you would want the Land Trust as named insured and the LLC as additional insured.

The only interest to receive the rent in the land trust would be to keep the anonymity with the payer. In my case however, all my rents are collected by a separate management company that is the one on the lease and then the management company pays my LLCs.

I'm not very familiar with GA, but I believe it is a deed state, ie the county tax collector is selling deed to the property at auction. The opening bid is for the price of the taxes plus cost. When you get the tax deed, you are then responsible for the future taxes. You will then have legal steps to take to close the 1 year right of redemption of the prior owner. If the prior owner wants to redeem it, there is a 20% penalty for the first year and 10% thereafter.

I have no idea about you paying the tax of someone else out of the auction process without getting a deed...

I would highly suggest that you familiarize yourself with your state statutes before getting into those as there are many formalities that you need to follow to avoid future issues.

Tax lien and deeds could be very safe and high return investments. But they could be tricky and require often a lot of time for proper due diligence. Without the proper knowledge and/or research time, they could be very risky.

 I don't know in which state you are...

But in Florida, if you pay the tax for someone else, you basically gifted him the money.... He has no legal duty to pay you back unless he signed a note. And even then, I don't know what kind of recourse you will have.

Tax certificate (or lien) are sold at auction by the county each year for delinquent tax. You are buying the lien, you are not paying the tax for the owner.

WY: anonymity and the charging order are the sole remedy (ie better asset protection statute)

Not only this holding is providing these two benefits to all the sub LLC but also, it is the only one filing the tax return as all the sub LLC are disregarded for tax purpose.

As a general rule, I prefer to have an LLC in the state where the property is located as you are doing business in the state and also need to be able to act in court like for an eviction.

The other option is to foreign register the LLC in that state, but the cost is almost the same as having a new LLC directly in that state. Then why no having the protection of a separate LLC?

My setup is as follow. Each property is in a land trust. Each land trust beneficiary is a single member LLC in the same state. All these LLCs are owned by a WY holding LLC.

From what I read today, before 1992 a corporation had to have $1 million of asset to act as trustee. After 1992 that requirement was removed. In 2006 other entities like LLC were authorized to act as trustee.