Seeking LLC advice and MI resource

[Catherine Brennan]

We are buying an investment property in the Upper Peninsula (MI). We are located in Chicago, IL.  And, we need to figure-out the best entity to purchase it under.

Our CPA recommended this:

The most efficient structure from a tax perspective would be a single-member LLC (SMLLC) that is disregarded for tax purposes (taxed as a sole proprietorship).

The activities of this LLC would be reported directly on your individual tax return and not require a separate tax return, which minimizes your filing costs.

Although we already have an LLC with 5 series used for our rental properties (all in IL) and thought we can add another series to this.

So we are wondering the best course to take and not clear on requirements?

 - create a SMLLC in IL then register it in MI?

- add a series to our existing LLC in IL, but register in MI? Not sure if that is doable?

 - create an SMLLC in MI?

Also, seeking resources to do this type of work.

Thank you, in advance, for advice on this.

[Crystal Smith]

Originally posted by @Catherine Brennan:

We are buying an investment property in the Upper Peninsula (MI). We are located in Chicago, IL.  And, we need to figure-out the best entity to purchase it under.

Our CPA recommended this:

The most efficient structure from a tax perspective would be a single-member LLC (SMLLC) that is disregarded for tax purposes (taxed as a sole proprietorship).

The activities of this LLC would be reported directly on your individual tax return and not require a separate tax return, which minimizes your filing costs.

Although we already have an LLC with 5 series used for our rental properties (all in IL) and thought we can add another series to this.

So we are wondering the best course to take and not clear on requirements?

 - create a SMLLC in IL then register it in MI?

- add a series to our existing LLC in IL, but register in MI? Not sure if that is doable?

 - create an SMLLC in MI?

Also, seeking resources to do this type of work.

Thank you, in advance, for advice on this.

You can register the LLC in Michigan as a foreign entity. But what you should investigate 1st is the costs associated with having a foreign entity in Michigan versus just having a local entity. We have some foreign entities registered in Illinois but then decided to establish an Illinois LLC using the series approach because of costs.