LLC Structure to simplify Taxes and Operations

[Garrett Canter]

Hello All,

I am getting to the point in my real-estate portfolio where the taxes are getting a little unruly. I have 4 rentals that are each held in a separate LLC for maximum asset protection (I know there seems to be debate whether this is the best strategy or if a umbrella insurance policy is good enough. I am curious if the umbrella insurance policy is definitely a better way).

This means I need to file a 1065 and K1 for each property. This makes spreading out some of my expenses (internet, meals, etc.) a pain. Is there a way to structure the LLCs so that a parent LLC or Operations LLC can files all the small deductions? Consolidate expenses?

I also don't have separate bank accounts for each LLC (although I'm told technically you should) so I'm hoping a different structure would allow one bank account to work, since that is what I'm using now.

Looking for some advice on how people with multiple units are structuring everything.

Thanks in advance

- Garrett

[Saran Mandhadapu]

@Garrett Canter

First form a Holding LLC as a partnership in Wyoming/Nevada. This holding LLC will file annual taxes and file K1's, get IRS EIN with partnership structure and open bank account.

Change the other local State LLC's structure where the property Title is held into an IRS Disregarded Single Member LLC which is 100% owned by Holding LLC. Get IRS EIN for local state LLC's as Disregarded entity and open separate bank accounts.

When you deposit and withdraw money from your personal bank account, only do it from/to the Holding LLC bank account. You can move money freely between Holding LLC bank account and local state LLC accounts. You can get one Credit card for the Holding LLC bank account for expenses.

With this setup, YOU own the Holding LLC and all other LLC's are owned by the Holding LLC. The Federal Tax returns are only filed for the Holding LLC.

Key terms -- Holding LLC is setup as Partnership with IRS and local state LLC's are setup as Disregarded single member LLC's with IRS when getting an EIN number. Your LLC Operating agreement should also have this ownership structure.

Note: This is not an advice, please do your own due-diligence.