it might make sense to form an LLC . That LLC , we can always choose later on how it wants to pay taxes. Meaning a year from now, we can look back and say, well, how did your active real estate do?
he has appeared in the movies amistad and the shift he is also the founder of take back the mic llc a youth center cultural movement company and he is the founder of his very own musical group called solfege ladies and gentlemen
money. Somebody paid for the tokens. Someone owns the LLC . Someone is is owns this. And so, there is value in the judgment and the assumption of risk and upside. Mhm. Which can be money or just the responsibility.
As we see after "Crazy Rich Asians," and a bunch of us saw "Always Be My Maybe" last night. The company LLC is Sunday Boba.
They travel around the country speaking about treatment-free beekeeping and the importance of microbial environment in beehive. Golden Rule Honey LLC is their honey business. And they maintain a certified food production facility located in the building where the pink plastic flamingo was born.
And John Law didn't want the reinvention. It was form an LLC . Form a company. Sell tickets.
things that we did with our somewhat little slice of notoriety that we were carving out, we decided to put all of that money into an LLC and try to save up to make something larger with it, like an independent movie or a TV show or something like that.
I guess I-- and I write persuasively for a living, so I thought my profile was pretty nice. I ended up-- I dissolved someone's LLC at the Harvard Club. I was in a proposal dance flashmob.
So that's a question we get all the time. Do I have to have an LLC to deduct certain things? Fortunately, the answer is no.
So earlier we were talking about maybe shifting income to your kids, pay them to help with your receipts and bookkeeping on the rentals. You can do that with an LLC , or you can do that if you own the property in your personal name. Same with travel expenses.
So if you're someone who has a lot of equity in the real estate, or if you have a lot of net worth, it could make sense to have an LLC , just for asset protection reasons. OK? Now, Are there other ways to get asset protection outside the LLCs , like umbrella insurance or anything else?
One little tip that we tell a lot of our clients is if you're someone who's doing active real estate, it might make sense to form an LLC . That LLC , we can always choose later on how it wants to pay taxes.
You have to look at your insurance. Make sure that you're adding the LLC as an additional insured on your insurance policy. If you have debt on the property, technically that's going to trigger to due-on-sale clause.
So a lot of our clients just leave the debt in their personal name, transfer title, keep paying the debt, and that's not an issue. back to your ownership or your LLC , or your estate, however you dictate it.
For some of you guys that may not yet be familiar with Trisha, I'll tell you guys just a little bit about her. So she is the CEO of realestateOCONA LLC . And she's super active in her community.
And I was like, Eric, talk to your lawyer and stuff like that. And set up your own LLC . Whether you work with me or not, set up your own company.
have in their relationship, don't try to be their therapist. But some people do things like create LLCs -- Yeah.
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As we see after "Crazy Rich Asians," and a bunch of us saw "Always Be My Maybe" last night. We, we have a LLC with Sunday Boba.
Right. So I hear people talking about setting up LLCs for tax benefits. Are there additional tax benefits you gain with an LLC ? Well, it depends. It depends on what you're doing in real estate.
Makes sense. Another question from a Googler-- "If I purchase a buy-and-hold property under my own name then later decide to create an LLC , how tricky is it to transfer the existing property into the LLC without paying gains? I've heard that this being done, but I've also read that it can be a pain." How tricky is it?
In fact, there's a cost that we just talked about, right? $800, at least, to the state every single year. But we do have a lot of clients who have LLCs for rental real estate. Mostly it's for asset protection purposes.
And so that's why we generally don't recommend using a C Corp or even an S Corp to own rental properties. That's where owning in your personal name or looking at LLCs for asset protection would be probably the way to go. Makes sense. Another question from a Googler-- "If I purchase a buy-and-hold property under my own name then later decide to create an LLC , how tricky
in media studies and professor of interactive Computing at the Georgia Institute Institute of Technology where he also holds an appointment in the sheller College of Business Bost is also founded partner at persuasive games LLC in independent game studio and a contributing editor at the Atlantic please help me welcome to the stage Dr Ian
So a lot of our clients just leave the debt in their personal name, transfer title, keep paying the debt, and that's not an issue. means that you will have to pay $800 for that out-of-state LLC here.
Or you want me to? But they're also looking at legislation so that instead of becoming an LLC or an incorporation, you can become a benefit corporation, which has in its legal charter, hey,
What are the questions that you get asked? That's why that for me the most basic thing to start a business is like get an LLC , open a bank account. Have the ability to
bloodshed. Um and did it as a complete atheist, right? um as an avowed atheist. is a generic version of Viagra. Viagra is a registered trademark of Beatatric Specialty LLC . Hymns is not
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Same with travel expenses. If you're deducting a home office, all those are the same with or without an LLC . Now, if you're someone who's more involved in active real estate-- and some common examples of that would be wholesaling, flipping, you're doing syndications,
Gotcha. I have a specific question for a Googler. "When would an S Corp. Make more sense than the LLC ?" The person owns two investment houses and would like to buy more. "The growing question for my husband and I is, should we own these individually, or have them in some sort of business corporation?
And from there, we can retroactively file changes with the IRS to say, OK, now I want this LLC to be taxed as an S Corp or a C Corp, or even just as a disregarded entity, being an LLC itself. On the active income side, if you're a real estate investor making active income, the S Corp does save you roughly 7% to 15%
She's also a founding partner of the consulting company Firefly Education, LLC .
a static RMBS portfolio, selected by ACM Management, LLC " and it has the Goldman Sachs logo up in the corner. This is the famous collateralized debt obligation that the SEC sued Goldman
have in their relationship, don't try to be their therapist. People are making Subchapter S corporations for years, creating LLCs for years-- just kind of using the legal tools at their disposal
So there's ways to make it work without spending a boatload. Right. So I hear people talking about setting up LLCs for tax benefits. Are there additional tax benefits you gain with an LLC ?
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going back to what we were just talking about. For rental real estate, whether you own one or whether you own 100, there's really not a tax difference whether you own it personally or in your LLC . Now, for that particular person, the question about as the S Corporation, that's a really good question.
Was it $10,000? Was it $100,000? And from there, we can retroactively file changes with the IRS to say, OK, now I want this LLC to be taxed as an S Corp or a C Corp, or even just as a disregarded entity, being an LLC itself.
That's where owning in your personal name or looking at LLCs for asset protection would be probably the way to go. Makes sense. Another question from a Googler-- "If I purchase a buy-and-hold property under my own name then later decide to create an LLC , how tricky is it to transfer the existing property into the LLC without paying gains?
It's not "tricky." But it can be done without any tax consequences. So you can own a property in your personal name, decide six months later to create an LLC and want to hold title for protection purposes. You can transfer title using a deed.
So a lot of our clients just leave the debt in their personal name, transfer title, keep paying the debt, and that's not an issue. Keep in mind, even though it's an out-of-state property, and if you formed an out-of-state LLC , just by the fact that you're a California resident
And then I graduated from college, and I didn't have any money anymore. And then it was kind of like, wait, so are we sure about this LLC thing? Because I could kind of use, like, rent and pizza.
I have a friend who's a literary agent. So right around that time, my friends and I in Derrick had shot our first movie, "Mystery Team," which we financed through all that money that we put into the LLC and I
the advertising platform that I've created, I started Millennial Branding, LLC , and that's my company now.
it could make sense to have an LLC , just for asset protection reasons. OK? Now, Are there other ways to get asset protection outside the LLCs , like umbrella insurance or anything else? Yeah, it's a great question.