Advice Needed: Best Practices for Managing a Maui Condo & Tax Structuring

[Sebastian Cifuentes]

Hello everyone; I’m reaching out to the community for some guidance and would greatly appreciate any insights you could share. Here’s a bit of background:

My in-laws own a condo in Maui that a large management group has managed until now. They've decided to part ways with this company and have asked me to manage the property on their behalf. (STR)

I'm researching the best and most straightforward ways to structure this arrangement from a business and tax perspective. The in-laws want simplicity since they have no interest in managing the unit.

From what I understand, it seems logical for them to handle the required taxes (TAT & GET) and compensate me via a 1099 form. However, I've also considered establishing an LLC, possibly in California. Still, I'm concerned about potential tax complications given the property's location in Maui, my residence in California, and my in-laws living in Washington.

Am I overlooking anything crucial here? Does anyone have recommendations or thoughts on approaching this situation for ease of management and tax efficiency? Thank you in advance for your help and insights!

[Loren Clive]

I've heard you can designate a family member as an employee and avoid taxes if you keep their income under a certain limit. This seems ideal for your situation. Ask a CPA or DM me for referral

I agree the LLC is unnecessary if you're just managing this one property for them.

A problem with this plan is that Hawaii State law requires an on-island contact. Perhaps you could get your housekeeper to be this person?