Creating an LLP and corp.

Hello,

I would like some advice about setting up a corp.

My accountant advises that I set up an LLP and then also a Corporation.
I can then hold the property in the LLP and use the corp to manage the
LLP. He also suggests doing this in Nevada.

I live in North Carolina.

I do not have any rental property as of yet, but will likely buy condos
and rent them out.

Can anyone speak to this strategy or offer any other advice?

Thanks in advance.


Dave

Re: Creating an LLP and corp.

Consider an LLC (as a "Holding Company") which owns and is the Manager
of one or more LLC's. Simpler, easier to maintain, and cheaper. Also,
only need to file one tax return.

Value of a NV LLC is questionable and expensive since it would have to
be registered
in each state where property is held, pay annual
fees, and file a tax return in each state. Very cumberson if you are
doing lettle deals.

Maybe you should consult an experienced lawyer to revgiew your fact
situation, your goals and aspirations, aqnd explain alternative ways to
structure your business/investments.

SteelVest

Re: Creating an LLP and corp.

In article <>,
wrote:

> I would like some advice about setting up a corp.
>
> My accountant advises that I set up an LLP and then also a Corporation.
> I can then hold the property in the LLP and use the corp to manage the
> LLP. He also suggests doing this in Nevada.
>
> I live in North Carolina.
>
> I do not have any rental property as of yet, but will likely buy condos
> and rent them out.
>
> Can anyone speak to this strategy or offer any other advice?

Your accountant is either very smart or quite dumb. If he
has a boat payment due, then I'll say smart since he is
going to make a ton of money off of you if you do this.

With property, assuming you only own one or two, you get
far better tax treatment as an individual. And no one is
going to lend money to either your LLC or Corp to buy
anything, not unless you sign personally. So, you end up
with all kinds of extra taxes, extra paperwork, and extra
work, but you really get no benefit.

You are going to have to be insured anyway, so just bump
up the numbers a bit and fully protect your assets.

It is possible that your accountant is suggesting the
Company A / Company B scam. That is, you have two companies
that work for each other. The local one shows a loss so
you shelter your local income. The Nevada one shows the
profit, which is not taxed in Nevada at the state level.
The problem is that it is illegal to do this unless you
register your Nevada corp in NC as a foreign corporation,
and then they will nail you with the taxes.

I'd suggest getting a 2nd opinion, this time, from a real
accountant, not one that gets into MLM's and scams.

-john-

--
============================================================ ==========
John A. Weeks III 952-432-2708
Newave Communications
============================================================ ==========

Re: Creating an LLP and corp.

There is greater liability protection with an LLC AND insurance.

Hopefully, you will (as TRammel Crow said) "get less small" and is it
easier and cheaper if the properties are already in the LLC than to put
them in.

Banks lend non-recourse to LLCs - even on small deals. Try FCUs or
FSBRs.

SteelVest

Re: Creating an LLP and corp.

"John A. Weeks III" <> wrote in message
news:
> With property, assuming you only own one or two, you get
> far better tax treatment as an individual.

All taxing agencies (state and federal) tend to "look through" the LLC to
its member's as the responsible parties in terms of accounting for, and
payment of, income tax. Profits and losses relative to passive activities
within the company flow to the members who remain free of individual
self-employment tax.

> You are going to have to be insured anyway, so just bump
> up the numbers a bit and fully protect your assets.

One major advantage of holding RE in an LLC is the protection given them
from judgment creditors and bankruptcy actions. For example, all of one's
real estate holdings can be placed into an individual LLC; or each separate
property or parcel can be held by a separate LLC, with a different investor
or beneficiary "partner" in each one. In using the LLC for holding real
estate in this manner, separate tax returns for each entity need not be
filed.and of even greater interest, there is no a personal liability for the
member/members with regard to a lawsuit against the property. Only the LLC
can be sued. Therefore, by holding properties in this manner, other
properties remain apart from involvement in the claims of creditors arising
out of a lawsuit against a particular LLC.