Using an LLC for Your Real Estate Investment


This post is in: Foreign Investors, Real Estate
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One of the most important parts of a successful tax strategy is the right business structure. When it comes to real estate investments, that usually means an LLC. (Unless you are a foreign investor from Canada, in which case we would NEVER put you in an LLC.)

With that bit of knowledge, you might decide you can just go it alone and save the money to pay an expert to set up, maintain and file for you LLC.

But there is a big problem. You may not know what you don’t know. And before I get going through some of the things you need to aware of first, I want to make sure you’re registered for the free webinar on Monday night. We’ll cover this and take your tax questions live. Sign up at http://www.DianesSeminars.com.

Here are some of the questions that we’ll ask before you narrow down the right structure:

(1) Are you considered a real estate dealer on any of your properties?

If you are considered a real estate dealer, you’ll have to pay self-employment tax of 15.3% unless your LLC elects to be taxed as an S Corp or C Corp. And if you’re only a real estate dealer on some of your properties, you will probably need to have two different structures so you can keep the tax strategies separate.

(2) Are the properties in states that make a Series LLC feasible?

Most states don’t have Series LLC law, but do allow it. Some, like California, are happy to have you bring even one cell of a Series LLC into their state. That’s because they’re then going to charge you $800 for every other cell of the Series LLC. In other words, you might want to proceed with caution if you have a property in California and are thinking of California.

(3) Is your LLC manager-managed or member-managed?

The wrong answer can cost you a tax deduction. Want to know which one is right? Come join us Mon for the free webinar. FREE! (really) – and we’ll answer your questions. Sign up at http://www.DianesSeminars.com

(4) Do you have the right language in your LLC Agreement?

If you’re planning to use the real estate professional deduction, you can’t use the ‘one size fits all’ LLC language. Do you have the right language?

These are just some of the topics we’re going to be covering Monday, February 25th. I hope you can join us!


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