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Started By
Message
LLC strictly to put property in
Posted on 9/20/23 at 11:44 am
Posted on 9/20/23 at 11:44 am
Bought rural acreage in LLC name simply to keep it from showing up under my name in a public records search (nosey ex wife to stupid to dig further than my name).
When it comes to tax time, what filings do I need to make sure I complete even though no money flows through this LLC, it is strictly holding the property mortgage? NO revenues, etc.
Property bought by XX Holdings, LLC, monthly payment coming from my normal checking account that my normal w2 check is deposited into.
ANy other forms/filings I need to keep track of.
TIA
When it comes to tax time, what filings do I need to make sure I complete even though no money flows through this LLC, it is strictly holding the property mortgage? NO revenues, etc.
Property bought by XX Holdings, LLC, monthly payment coming from my normal checking account that my normal w2 check is deposited into.
ANy other forms/filings I need to keep track of.
TIA
7
Posted on 9/20/23 at 12:14 pm to ThatsAFactJack
Consult your CPA. Probably not much other than maybe an informational return in the state you filed the LLC.
Not sure if it applies to you, but be sure you did not have the LLC elect to be an S Corp.
Not sure if it applies to you, but be sure you did not have the LLC elect to be an S Corp.
Posted on 9/20/23 at 4:37 pm to horsesandbulls
quote:
Not sure if it applies to you, but be sure you did not have the LLC elect to be an S Corp.
How come? I'm sure it's complicated but wondering as I have a IC S Corp and been thinking about maybe one day buying some land or home, and not sure if putting it under it is a route or not. (If there is a good thread that reviews this, the link would be appreciated.). Thanks.
Posted on 9/20/23 at 5:06 pm to HagaDaga
Do you plan to keep the asset long term, or flip it in the short term (next 36 mos?)
Long term, you might consider a trust.
Short term an LLC or C-corp might work best, depending on what you have in mind …. good luck
Long term, you might consider a trust.
Short term an LLC or C-corp might work best, depending on what you have in mind …. good luck
Posted on 9/20/23 at 5:34 pm to ThatsAFactJack
quote:
Property bought by XX Holdings, LLC, monthly payment coming from my normal checking account that my normal w2 check is deposited into.
Definitely don't comingle personal funds with LLC funds. Set up a different account for the LLC. I get that YOUR reason for the LLC is more so it's not tied to a name search and not for liability reasons, but you still want a clear separation.
As for filings, it will depend on your state. If there's no revenue, then might just be informational - or at least a "no tax due" report to the state showing $0 in gross receipts.
I've never had a no revenue LLC, but it's still a business and you're still the sole member - so as a pass-through entity (even though $0 has passed through), you might still need to issue a K-1 from LLC to yourself/individual so that you can account for the $0 on your own personal income taxes (federal).
Consult a tax professional, but that should get you in the ballpark - or at least give you some questions that need to be answered.
Posted on 9/20/23 at 5:37 pm to Burt Orangello
Piece of advice ...
The biggest pain in the arse is figuring out what does/doesn't need to be done. K-1s, informational reports, no tax due reports, etc. are easy as hell to actually DO.
Consult a professional for the first time, make a checklist of what was done, and then just repeat each year (yourself if you want). Since you'll only be dealing with it once a year, it's hard to remember what needs to be done and you'll forget something.
The biggest pain in the arse is figuring out what does/doesn't need to be done. K-1s, informational reports, no tax due reports, etc. are easy as hell to actually DO.
Consult a professional for the first time, make a checklist of what was done, and then just repeat each year (yourself if you want). Since you'll only be dealing with it once a year, it's hard to remember what needs to be done and you'll forget something.
Posted on 9/20/23 at 7:44 pm to ThatsAFactJack
Posted on 9/20/23 at 8:15 pm to ThatsAFactJack
What state?
Posted on 9/20/23 at 8:43 pm to HagaDaga
quote:
How come?
Long explanation
Shorter explanation:
-your heirs can’t get a step up basis in the property in the event of your death
- distributing the property may trigger a taxable event
- if you fail to keep s corp compliance, the irs blows your s corp status and you are now a c corp. congrats on the double tax.
This post was edited on 9/20/23 at 8:50 pm
Posted on 9/21/23 at 10:24 am to LSUFanHouston
quote:
LSUFanHouston
quote:
What state?
LOUISIANA
Posted on 9/21/23 at 12:04 pm to ThatsAFactJack
If it is a single member LLC that has no income or expenses, simply holding property, you only need to file your annual report with the LA secretary of state.
As others have said, I would strongly consider setting up an LLC bank account and moving money from your personal account to the LLC account, and pay the note out of that.
That helps ensure the legal liability protections won't be voided.
If legal liability is not a cocnern for you then I guess it doesn't really matter.
As others have said, I would strongly consider setting up an LLC bank account and moving money from your personal account to the LLC account, and pay the note out of that.
That helps ensure the legal liability protections won't be voided.
If legal liability is not a cocnern for you then I guess it doesn't really matter.
Posted on 9/21/23 at 12:34 pm to LSUFanHouston
quote:
LSUFanHouston
quote:
If it is a single member LLC that has no income or expenses, simply holding property, you only need to file your annual report with the LA secretary of state.
Holding property that has a mortgage, so technically there are expenses (monthly note). There is no income generated. Whether I set up an LLC bank account and transfer funds from my usual checking account or just pay it directly from usual checking account, the money to pay note comes from my W-2 job.
Concern for legal liability is not 0 but pretty damn close. Its a rural home site that will be built on in 2-3 years but for now is just cleared land.
Posted on 9/21/23 at 6:48 pm to ThatsAFactJack
quote:
nosey ex wife to stupid to dig
Hmmmm
Posted on 9/22/23 at 8:29 am to ThatsAFactJack
quote:What is she going to do about it?
Bought rural acreage in LLC name simply to keep it from showing up under my name in a public records search (nosey ex wife to stupid to dig further than my name).
quote:But it will have liabilities, it will have to have some revenue.
When it comes to tax time, what filings do I need to make sure I complete even though no money flows through this LLC, it is strictly holding the property mortgage? NO revenues, etc.
quote:Do not do this.
Property bought by XX Holdings, LLC, monthly payment coming from my normal checking account that my normal w2 check is deposited into.
Posted on 9/22/23 at 12:32 pm to ThatsAFactJack
Maybe I’m doing something terribly wrong but I have investment properties in two other states than I live in and I’ve never considered starting a LLC. I don’t even do a separate tax return. I claim the income and deduct the expenses. I don’t see the advantages of an LLC.
Posted on 9/22/23 at 2:44 pm to Motownsix
quote:
Maybe I’m doing something terribly wrong but I have investment properties in two other states than I live in and I’ve never considered starting a LLC. I don’t even do a separate tax return. I claim the income and deduct the expenses. I don’t see the advantages of an LLC.
Liability protection.
No tax differences really.
But many attorneys will tell you they can bust out an LLC if necessary.
Posted on 9/22/23 at 4:13 pm to ThatsAFactJack
quote:
Its a rural home site that will be built on in 2-3 years but for now is just cleared land.
Not sure where you are, but in LA an individual homeowner gets homestead exemption on property taxes up to the first $75 of assessed value on their residence, which can save a nice bit each year. Unless things have changed, the exemption does not apply if an LLC or other business owns the home.
Other states may have something similar. Check into it before perhaps saddling yourself with an unnecessary property tax bill. The ex would really get the last laugh if you did that just to keep her prying eyes away.
Posted on 9/22/23 at 4:48 pm to LSUFanHouston
What kind of liability protection? I own vacant timberland and have considered an LLC. Everyone else in my shoes seems to, but I can’t understand why.
Posted on 9/23/23 at 11:34 am to turkish
quote:
The main reason to open a real estate LLC is to reduce your personal liability. For example, imagine if someone got injured on your property and wanted to sue you for damages. Since your LLC owns the property, they would have to sue the LLC, meaning that your personal assets wouldn’t necessarily be on the line. Any damages you may have to pay out can come from your business instead. Another example might be if you fail to make payments on a loan for the property. If the debt is in your LLC’s name, you won’t have to wipe out your personal assets to satisfy the remaining loan amount.
Forbes article on your question
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