Advice on setting up an LLC

[Tom C]

I want to setup an LLC for my property investment business, although I have been told not to title the rental property in the LLC's name, due to the fact that when evicting, you have to have an attorney to do the eviction. I live in Ohio and does anyone know if this is true?

Also, I want to do a quick and dirty LLC online for 100+ bucks. Is there any advantage to having an LLC out of state verses just setting one up here in Ohio? I am sure this will be one of many that I will need in the future.

Thanks

Tom

[Joe Wilson]

What are you going to do? Will you have the LLC be the owner and manage and collect the rent?

Are you looking for a company to do the management work?

If you are going to own the property in your name and have the LLC do the management (collect rent, pay bills, maintenance), then that will be considered ordinary trade or business income and subject to SE tax.
You would want an S-corp to do that. It will save you money.

If the LLC is the owner of the property, then the LLC will receive the rents and it will be rental income, which will save you on the SE tax and you will have the flexibility to pass out the cash as distributions that are not taxable.

The S-corp cannot pass out distributions greater that basis, but the LLC can which is a plus for LLC.
The LLC has SE tax for income that is not RE income but the S-corp does not which is a plus for the S-corp.

It seems that if the company is the owner of the property, then you will want to be an LLC and you will be the member-manager of that LLC. If you are going to be the only member of the LLC, then you will have a SMLLC (single member LLC) and it will be disregarded for federal tax purposes and that means that you will not file a 1065, but include it on your Sched C/E (just like if you owned it in your own name). Being the member-manager of the LLC, you have the ability and authority to act in any way on behalf of the company. You may want to use an attorney to file an eviction anyway if that occurs.

If you have more than one person going in with you in this LLC, then you need to go see an attorney and disregard these $100 jobbies on the internet.

Joe