BUSINESS FORMATION AND LEGAL STRUCTURE
STEP ONE: DETERMINE YOUR BUSINESS STRUCTURE
QUESTION: Should I purchase property in my own name or under a business name?
If you're serious about investing in real estate, protecting your investments and limiting your liability, strongly consider incorporating your business.
A limited liability company, or LLC, structure can protect your home and other personal assets from court judgments.
As you can imagine, rental-property ownership, is fraught with inherent risks such as slip-and-fall claims, injury claims, or fire-related claims.
Many owners of income-producing real estate like to operate under an LLC because their personal assets, such as personal property, vehicles, stock, and their other LLCs, aren't at risk if an accident or other incident occurs on premises or if undesirable flaws in it suddenly surface.
Generally, all that is at stake in a lawsuit against an LLC is each member's investment in that LLC business.
QUESTION: What are some of the tax benefits to owning real estate in an LLC or other business entity?
You also get an increased tax shelter for retirement and pension plans under most LLCs, and can deduct benefits such as health and life insurance and travel expenses for you or any employees you might add in your real estate venture. If your LLC has more than one member, then it's considered a partnership for IRS purposes and an extra filing is necessary.
Each investors situation and circumstances vary, please make sure you contact a licensed tax specialist for your best advice and protection.
Our Legal and Tax Team
Our legal team is a unique hybrid of legal and International taxation specialists. This is critical to help limit liability of owning property and greatly reduce your tax liability when owning and collecting income from real estate.
Many investors jump into our market without properly knowing how to protect themselves, their investments and which elections to make to minimize their yearly tax liability. Our legal experts customize these services and their expertise to fit each investors needs.
Additionally, if you're investing from outside of the U.S., each country's laws are different and nuanced. It is extremely important to work with teams that have this expertise for your protection.
On to Step 2...
QUESTION: Should I purchase property in my own name or under a business name?
If you're serious about investing in real estate, protecting your investments and limiting your liability, strongly consider incorporating your business.
A limited liability company, or LLC, structure can protect your home and other personal assets from court judgments.
As you can imagine, rental-property ownership, is fraught with inherent risks such as slip-and-fall claims, injury claims, or fire-related claims.
Many owners of income-producing real estate like to operate under an LLC because their personal assets, such as personal property, vehicles, stock, and their other LLCs, aren't at risk if an accident or other incident occurs on premises or if undesirable flaws in it suddenly surface.
Generally, all that is at stake in a lawsuit against an LLC is each member's investment in that LLC business.
QUESTION: What are some of the tax benefits to owning real estate in an LLC or other business entity?
You also get an increased tax shelter for retirement and pension plans under most LLCs, and can deduct benefits such as health and life insurance and travel expenses for you or any employees you might add in your real estate venture. If your LLC has more than one member, then it's considered a partnership for IRS purposes and an extra filing is necessary.
Each investors situation and circumstances vary, please make sure you contact a licensed tax specialist for your best advice and protection.
Our Legal and Tax Team
Our legal team is a unique hybrid of legal and International taxation specialists. This is critical to help limit liability of owning property and greatly reduce your tax liability when owning and collecting income from real estate.
Many investors jump into our market without properly knowing how to protect themselves, their investments and which elections to make to minimize their yearly tax liability. Our legal experts customize these services and their expertise to fit each investors needs.
Additionally, if you're investing from outside of the U.S., each country's laws are different and nuanced. It is extremely important to work with teams that have this expertise for your protection.
On to Step 2...