Greetings,
Does anyone have a tax strategist/planner that they recommend?
Oh, and is there any value to creating a LLC or other entity for investing in MHPs and funds?
These are good questions, but they are still too high level without much context of your goals.
Examples - if your tax strategy questions are about 1031 exchanges then there are certain people for that. If you are looking at developing in an Opportunity Zone then there are people for that. And if you’re looking to write off bonus depreciation there are a separate group of specialists for that.
Regarding protection via vehicles such as LLC’s and Corporations you should consider the risk reward. If you have a small net worth you probably don’t need one and can carry title in your name. When you have millions of dollars you need a broader asset protection plan. A good real estate attorney can help you.
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Excellent, that helps us think through these issues, thank you for your comments.
The below is some of the worst advice you will find on the internet …
Regarding protection via vehicles such as LLC’s and Corporations you should consider the risk reward. If you have a small net worth you probably don’t need one and can carry title in your name.
Mike,
You should have an LLC, or some other protection vehicle for every property you own. Also, normally makes sense to have a new LLC per property.
Lots of good tax/planner advisers and attorney’s out there.
Send me a DM if you want to have a brief call on this and I can point you in the right direction.
APM
LLC’s have a lot of disadvantages too, which was my point, and they are not for everyone. Your advice is for everything to be in an LLC. So the guy in Northern California who has a small park should pay $800 per year to keep it in an LLC? Give me a break. Maybe a GL policy or something else, but not necessarily an LLC.
There is a balance, and not everything is black and white. That’s my nice way of saying I don’t agree with your advice either.
Right now, we are only utilizing funds, not individual properties. What is your suggestion now regarding LLC’s?
By funds, do you mean you are investing as a silent/equity partner in other people’s deals?
If you do not own a property then the need for an LLC or another vehicle is not likely necessary from an asset protection perspective. Still might make sense from an anonymity or creditor protection vehicle. Of note, single member LLCs are disregarded entities so would not require additional tax return filings (though may still be subject to some state registration requirements). Personally, I own nothing in my own name and even my LLC membership units are owned by an LLC (with me being the sole member of this second LLC). This “nesting” makes it harder for my name to be found, which provides some benefits of anonymity and also makes it less likely I am the target of a lawsuit (versus having your name/image/wealth out there for exposure). Case by case basis might be the answer/non-answer you are looking for, but in general there is minimal expense/pain to have an LLC versus not having one. You can also evaluate having a parent/holding LLC and subsidiaries under neath.