LLC Structuring in the US

Hi Leo.
You need to ask the experts and one of them is a good mate of mine. Feel free to send your questions to [email protected] Jim is an Aussie who helps Aussies with all the legalities if investing in the US of A.

Hi Leo,

Not sure as to what stage of the buying process you are in however I would recommend that you ensure you have the correct structure to suit your individual investment strategy sorted out prior to making any investments… It's money upfront but saves a lot further down the track.

It is suggested you speak with a qualified practioner but ensure you look in to setting up a head LLC (which can be owned by your Australian entity i.e Family Trust) in a tax and asset friendly state (i.e. Wyoming) which you can then have multiple underlying LLC's which may own real estate. When setting up this structure you need to keep in mind asset protection and tax minimisation strategies which will lead to the topic of whether or not you want that head LLC taxed as a C Corporation. It's important you make the correct elections from the beginning.

Cheers

HankieRich,

The only real reason (in my experience, although I'm no accountant) is that a Corporation is "capped" in the amount of tax it pays (whatever the Corp tax rate is in its home state) although the paperwork is a lot heavier, so it usually only makes sense for larger deals, most likely not for just a few properties.

An LLC goes against your personal income tax, and while there are ways to minimise/reduce your taxes, there is no cap as such, other than once you're in the highest tax bracket, that's the highest you will go.

A downside of the Corporation (unless you elect to be taxed as an S-Corp, which I don't think you can as a non-US citizen) is that you first pay corporate taxes on the profits, then you need to pay income tax (personal) on whatever money you take out.

[email protected]

Agree with HighIncomeProperty with regard to company set up. It's also important you have a well set out operating agreement especially if your LLC has multiple members.

In answer to transferring property, not sure you would need to do this unless you purchased in the wrong entity or the county wrote the deed in the wrong name, which they do by the way.

You can transfer property between companies, but you will have to pay the transfer tax for each and other smaller fees. This is worked out differently in each state and sometimes counties, so make sure you have the right information beforehand. It's also based on the tax assessment at the time, not what you may have bought the property for.

Ian
http://www.theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with A Sense Of Humour

Hi Quickchick,

What is the rate of hard money lenders?  What area in Florida are you looking at? I am interested in Florida as well.     

Hi Hankie Rich,

My education connections were in Florida, so that's where we set up our LLC.
However we're buying property in Phoenix, with our Florida LLC.

We frequently visit family on the western side of USA so preferred to invest where it's convenient for us.
 
Question for Jurgen: How much do you pay a year, getting taxes done for many different LLC's?