Should you change your LLC regularly? Attorney says yes!

[Matthew B.]

I've had an attorney and a CPA tell me I should change my house flipping LLC regularly. Run a dozen or so deals through, then let the LLC dissolve and create another one.

I believe the reasoning was for liability purposes, and the CPA said it was to avoid IRS attention.

It doesn't seem right to me. No other legitimate business does this that I know of. Is anyone else doing this for house flipping?

[Percy N.]

@Matthew B., happens in business all the time.

In corporate america, it is not unusual for a fortune 500 company to have 600-700 entities across the globe for various reasons (taxes, regulatory and liability being the main ones).

My "other job" is flipping companies, in a sense, and this structure is common, especially for partnerships with other investors.

Commercial RE ($10MM+) is also conducted in a similar fashion.

In fact, this is the norm outside of individual investing.

You can always get a second opinion from another lawyer and CPA to see if it makes sense for your situation.