Tax questions with LLC

[James Lau]

I'm about to invest in my first real estate deal. I'll eventually consult with a CPA on tax issues, but thinking ahead about tax issues. I'll invest with my personal funds but will be creating an LLC as a limited partner in the deal.

As income comes to me and when the property gets sold, do I need to keep all of the money and proceeds in this LLC? In other words, I'd like to have the option of keeping the proceeds in the LLC to invest in other properties or to be paid back in full.

If it goes to the LLC and then to me, will I get taxed twice?

Thanks.

[Kory Reynolds]

I am not an attorney, but it seems to me no need to invest through an LLC into the syndicate. It seems in a typical situation the syndicate will be an LLC, you already are a limited partner, you already have liability protection from the activity of the syndicate. Previously it may have provided a limited sense of anonymity, but now if your LLC is a single member, the K-1 is made out directly to you with your LLC information pretty much being a footnote. Depending on your state, you may even be providing yourself with unnecessary state fees to maintain your LLC to provide protection not needed.

Again, not an attorney, but perhaps one will chime in and give some thoughts. With all the syndicates I work with, certainly some investors use single member LLCs, but more often than not they invest directly.