Taxes and LLCs for Real Estate Investors
Вставка
- Опубліковано 21 гру 2020
- In this video I'm going to talk about taxation of your rental real estate Limited Liability Company.
FREE TAX & ASSET PROTECTION WORKSHOP
Learn about Real Estate & Asset Protection from Clint Coons, Esq. and Toby Mathis, Esq. at our next all-day free Livestream 9 am to 4 pm PT. on Saturdays. Our attorneys and specialists will answer ALL questions: 👉 Save Your Seat: aba.link/20066a
I often get asked, "How am I going to be taxed on the income that the LLC is generating?" The idea is to get a general understanding of how the LLC works from a tax standpoint and how you can pull money in and out.
Questions or requests for a video topic are always welcome!
---------------------------------------------------------------------------------------------------------
SUBSCRIBE
ua-cam.com/users/RealEstateA...
~~~~
FREE REAL ESTATE INVESTMENT STRATEGY SESSION
Claim Your FREE 45-minute Investment Strategy Session to receive business planning tips and asset protection. 👉 aba.link/ncc
~~~~
FINANCIAL PLANNING & RESOURCES
Download your free copy of Un-Tax Yourself eBook and discover the secret to real estate wealth is in the tax deductions. aba.link/95b219
For financial strategies, podcasts, articles and details on upcoming workshops visit aba.link/clintaba
Here’s a little about me and my book Asset Protection for Real Estate Investors
aba.link/clintbio
~~~~
FOLLOW US:
Instagram: aba.link/instagram
Facebook: aba.link/facebook
Twitter: aba.link/twitter
LinkedIn: aba.link/linkedin
~~~~
CONTACT US
Phone: 800.706.4741
Email: info@andersonadvisors.com
Fax: 702.664.0545
ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
---------------------------------------------------------------------------------------------------------
The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#RealEstateInvesting
![How Much Should LLC Owners Save for Taxes? [Budgeting 101]](http://i.ytimg.com/vi/pcGBaX26kfE/mqdefault.jpg)
Claim Your FREE 45-minute Investment Strategy Session to receive business planning tips and asset protection. 👉 aba.link/ncc
Can’t imagine a world without Clint. Thanks for your great, educational RE videos. Means the world to me
Wow! Thanks
Thank you so much! I’ve been looking around for tax consequence videos and finally found yours. Merci beaucoup!
Really love the examples with real numbers
Thank you for continuing to inform and educate people. Happy Holidays to you and your family.
Same to you!
Yo man ur pure gold . all ur videos are treasures. APPRECIATE U
I appreciate that!
Thanks for this education video.. more please!
More to come!
I love these vids...
Great information. Really needed it
Glad it was helpful!
Thank you for clear explanation.
You are welcome!
Shout to my tax lady Beverly✅🙏🏾 I feel ahead of the game 🤗
Thanks 🙏
Amazing video Clint thank you so much!
If your LLC (holds 4 properties) is disregarded, how will it show on your taxes? Schedule C for the LLC under your tax return or Schedule E (as 1 or as 4 separate properties)?
Thanks!
Schedule E as 4 separate properties
Really nice video Clint!
If you don't mind, Can you make one about flipping with a C-Corp?
Also, does the C-Corp have to be set up in each state you decide to flip? Or can one C-Corp flip in multiple states?
Have you seen these videos ua-cam.com/video/MX6TzmDCLr0/v-deo.html
ua-cam.com/video/_uzbASbH3aY/v-deo.html
Great channel, but noticed you never talk about New Mexico..do you think NM is a good place for an LLC ? Thanks
New Mexico offers great privacy but their charging order protections are not as strong as Wyoming. New Mexico's statute 53-19-35 does allow for charging order protections but it does not mirror Wyomings which makes the charging order the "sole remedy". The statue also fails to mention single member LLC protections under the charging order protection. Finally, the limited partnership statute in New Mexico which courts could look to as analogous when crafting a remedy, allows for the appointment of a receiver if a charging order is awarded to a creditor of a limited partner. In essence - too many "what if" questions for me to be comfortable with using it as a holding company.
Wow!
Thank you for this video! If a Wyoming LLC is taxed as a partnership, and owns LLCs that are disregarded entities in Missouri and Oklahoma, what happens to the state tax returns? Since the disregarded LLCs dont file tax returns, does that mean the Wyoming LLC will file state returns in MO and OK? Or will the state break-down be noted on the K-1 and just go straight to the partners individual tax returns?
A disregarded LLC does not file a federal return but if the state imposes a return on the LLC it will file a state return.
Great thanks for the video! Quick question, why wouldn’t you setup your LLC to be taxed as an SCorp if you are doing residential real estate buy and hold?
You could but it complicates future planning because if you move an appreciated asset out of an S-Corporation it is a taxable event. With a partnership we do not have this issue.
having appreciated assets in a corp or s corp creates all kinds of basis/ taxable event issues on the inauguration and liquidation
More excellent content!!
How about for an assisted living facility? Not a residential that was converted, but larger, say 20 beds?
Same principal applies. You would want to keep the property held separate from the business.
@@ClintCoons Thanks! My notifications were off, so I didn't know that you had replied. I appreciate it! Happy New Year!
thank you
You're welcome
Great video ! Thank you so much for educating us ! I have a follow up question about the example you gave with a 2-member LLC. If I take a loan in the name of the LLC and take a distribution, what happens to the deductibility of interest ? I am assuming the distribution is then reinvested in another property, and let' say my wife always have a 50/50 interest in everything we do to make it simple. With interest tracing, can I still claim a deduction ?
Yes you can!
Hey Clint I enjoyed all of your content! I have a question... I formed my LLC in August of 2020 haven’t made any profit for that year but had Expenses. Do I still need to file tax for my LLC?
Not sure. If your LLC was set up as a disregarded entity then it does not file a tax return. If was set up as a partnership, S-Corporaiton, or C then yes you should file to lock in your startup expenses.
@@ClintCoons I’m a single owner no partnership
@@DuyNuge412 Provided you did not elect S-Corporation or C-corporation tax treatment when you obtained your EIN then you do not have a filing obligation for a disregarded LLC. You should review your EIN application to determine how your entity was set up for tax purposes.
Wow you get 10%! I get 5%. Can you make a video on how to Distributions from wife?
Just found your video and this is great info. I am looking to start up and red some things on asset protection, namely to have personal stuff in one LLC and each property in a separate LLC (ie a business would own a business). This would protect my property if I were sued directly and protect my home, retirement, cars, etc if the property were sued. How does this play into taxes? Is this a double flow through? Am I taxed at each entity?
If I partnered with another investor, his S-corp and my LLC would own a partnership with the property. Just wondering about implications. Thanks for this great information!
The taxes you pay will be at your personal level. The entities you discuss are all flow through to your personal 1040. The only entity that pays tax at its own rate is a C-corporation.
@@ClintCoons Thank you for the reply. Appreciate the information.
I've been watching your videos like crazy and so I have to ask/point out, and i could be wrong here, that in either one of your videos or another regarding real estate investing, distributions require you to pay FICA self-employment tax.
What am I missing here?
Thanks for these informative videos!!
FICA is payable depending on the activity level of the LLC. If the LLC is engaging in an active business and it is treated as a disregarded entity or partnership (which the member participates) then you are correct e.g. Flipping or wholesaling. If the LLC is engaged in a passive activity such as rental real estate then no, you would not be subject to FICA.
@@ClintCoons thank you for the clarification! So, ideally i don't want to be involved at all other than hunting down more deals? For instance, I shouldn't be listed as the manager?
@@fuhgetabuttit3849 Depends on the strategy. If it is for buy an hold then no. I prefer to list myself as an officer of the entity holding the property. Officers are not listed on the state database.
How does this work with taxes when you want to pay the mortgage down with rental income? I'm about to buy rental property in Colorado and I'm in Colorado....Please Correct me if my structure is wrong....... Buy house under wifes name, day after closing transfer deed to Newly created Land Trust with WY LLC, me and my wife as beneficiary. Then I create a new LLC or Scorp in Colorado to manage the property, wife and I are 50/50...SCorp or LLC pays for upgrades/repairs, eventually starts collecting rent. How do you use that rent to pay down the mortgage and how does that look for figuring out final income tax due? .....On top of that, if we file jointly, is it better to be 50/50 on the LLC or Scorp to further reduce taxable income or better to have only one person as 100%? Does the structure I described also keep our name 100% off county records for owner of home state records for business? thanks for your videos, always trying to find new ways to reduce taxable income
Hey Clint, my husband and I formed an LLC for a few of our rentals in 2020. We formed as a multi-member just for the 2 of us with a disregarded income for tax purposes. Do we have to file taxes for our LLC or just Schedule E for our rentals?
If it is disregarded you will not need to file a tax return for the LLC.
@@ClintCoons Hi Mr. Coon, why in most videos, you recommended CA Investor (only husband and wife are members of LLC) to file WY Holding LLC using Partnership instead of Disregard? Thanks,
Do you count the loss as a paper loss?
Great video btw!
Yes, real estate losses like I am describing do not affect the money you are placing in your pocket. The loss is a tax loss if that helps.
@@ClintCoons got you, thanks.
Question: If I have an LLC (rental property) in a different state then where I reside, do I need to file state taxes in that state? Do you have any videos speaking to this?
It would depend on the state. Some states do require you to pay tax on income generated in the state.
Hello,
Can I buy house under my LLC and rent it to my self?
I live in CA. I purchased 3 rental SFRs in Arkansas and 2 in Tennessee. I would like to put each in an LLC. It costs $800 per year for each....or $4000 total every year. Is there a more cost-effective way to do this?
Yes. Set up a Wyoming Statutory trust to be the sole member of a DE Series LLC. Foreign file the DE series LLC in AR and create a cell for each property. The cell will be owned by the series parent. Set up 2 land trusts in TN for those properties and have the beneficiary of the land trusts be 2 different cells of the DE series LLC. Benefits - no CA franchise tax and you will avoid the TN franchise tax. If you would like a FREE 30-minute consultation, contact dlewis@andersonadvisors.com.
Should the owner's drawing be filed on your personal income tax return as income?
What is the "owners drawing"
@@ClintCoons when you have a llc and your not listed as an employee, but you draw money from the business, just like you are saying, the term that was used in college was the owner's drawing, same thing! To keep from having to do payroll
If I transfer my paid off property into My LLC, do I need to pay capital gain tax? I live in Michigan. Thank you!
You do not. Tax free transfer. Congrats on the paid off house.
My grandfather passed away.... He left me a rental property. The tenant still occupies the home still. I've created an LLC, EIN. Opened a business checking account and also a savings business account. Purchased landlord insurance.....I'm confused my next step is... Wish I could ask my grandpa 😭💔
Do i report the llc’s profit as an income if it goes back to reinvest in the llc to expand it or a reinvested profit is not taxable?
Thank you
Yes it is income
Do you mean that i determine the profit, pay the income tax due on it and then i can reinvest it to expand the business?
@@adamoliver5395 Yes that is correct
Can my wife and I name ourselves as a single member of an LLC. We'd like to avoid the 1065.
Yes if you live in a community property state.
@@ClintCoons We live in Oklahoma, which I don't believe is a CP state. I guess we could let our revokeable living trust be the single member?
The California Franchise Tax Board is stealing my federal stimulus money I have years of overpayments they refuse to address
What if I buy a house and just flip it
ua-cam.com/video/_uzbASbH3aY/v-deo.html
Thanks 🙏