All Forum Posts by: Bill Walston

Originally posted by Ann Bellamy:

There are very few states, if I'm correct, that have series LLC's. I don't think NY is one of them. But definitely check with a good real estate attorney in the state where the property will be. And not just a title company that does conventional real estate closings. You need an attorney knowledgeable about complex real estate structures and deals.

Right you are Ann. If I remember correctly, the states that allow the formation of a Series LLC include Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, and Utah.

Originally posted by Peter Seely:

So to confirm, If I open an LLC I need an IEN but will I still need an ITIN for myself and my wife who the income will be passed to or is it wise just to file as an S corp?

Having an LLC taxed as an S-Corp probably is not an option for you. S-Corps do not allow foreign shareholders. If you are holding this property for rental purposes and choose to go the LLC route, you should opt for the default tax status of a partnership.

Your LLC will need its own EIN.

In order to obtain your personal ITIN number, file Form W-7 Application for IRS Individual Taxpayer Identification Number. (Get a copy here http://www.irs.gov/pub/irs-pdf/fw7.pdf.)

Originally posted by Peter Seely:

Also, How do I open up a US bank account for my LLC when I am out of country? I thought about trying HSBC since we bacnk with them here.

The registered agent for your LLC should be able to open up a checking account for you. That being said, are your planning to use a property manager? If so, do you actually need a US bank account?

Irrespective of the pros and cons of a DE Series LLC, will your properties all be located in DE? If not, your question, in my opinion, is pretty much moot. Your LLC should be formed in the state in which the property is located.

Originally posted by Susan Winderman:

Hi, is it possible to do a mortgage assignment & a short sale simultaneously? What would be the procedure for doing that? Thanks, Susan

Hi Susan - In a short sale, the bank agrees to accept less than the full balance due on the note. As such, they expect that amount to be paid at closing with new funds from the buyer. That's not what "AMPS" is all about.

"AMPS" is nothing more than buying a property "subject to" the existing loan. The loan is not paid off at closing. They buyer will make payments on the existing loan, BUT the seller will remain liable for the debt.

US residents pay tax on their world-wide income. The taxable gain from the sale of the condo will be the current sale price, less its value when inherited in 2001, less any improvements or other increases to basis, less any selling costs.

If Russia collects tax on the sale, you may get a tax credit to offset some or all of the foreign tax.

Originally posted by Dave T:

Originally posted by Bill Walston:

The only LLC requiring a C and SE form is a single-member that accepts the default tax status.

To clarify, the only LLC requiring a C and SE form is a single member LLC that accepts the default tax status, and, operates an active income business.

A residential rental activity is a passive income business and the disregarded entity LLC would still put all the LLC income and expenses on Schedule E (not C and SE).

I concur :-) As the OP indicated the "tax guy" mentioned "using other tax strategies to make back the 15% or so you've lost in self-employment taxes" I spoke only to an LLC with earned income. An LLC with passive income would have no need to save on employment taxes - and, IMHO, no need to file an S-Corp election.

Originally posted by calgal:

I recently attended a bootcamp where one of the speakers was a tax guy.

What makes him a "tax guy?" What were his credentials? JD, CPA, EA? Or perhaps none of these?

Originally posted by calgal:

His take was that this S-corp election requires Schedules C and SE, putting a red AUDIT ME sign on your back and exposing investors to a high risk of audit (more highly audited than any other type of return)

If this is what he said, then I certainly agree with Steven; the guy is a moron. An LLC that elects to be taxed as an S-Corp files an 1120S NOT a Schedule C or SE.

The only LLC requiring a C and SE form is a single-member that accepts the default tax status.

Originally posted by calgal:

I brought it up to my CPA, and now she wants to take this guy on and go 15 rounds.

Sounds like you have the right CPA :-)

Originally posted by Colin Bochicchio:

This is really a basic asset protection strategy so you protect the LLC members and the LT protects the corpus.

No only do you get anonymity in your real estate holdings you get a degree of asset protection not ironclad yet nothing really is..
Most investors do not understand the distinct advantages of using land trusts in their investing there are actually 30 realized benefits if not more.

Sorry Colin, but in this case I have to disagree. David said that he bought the property in his own name. His anonymity is pretty much shot from the get-go. He would have to transfer the property to the trust/trustee, and that transfer would be on record. For someone just checking property ownership a land trust may provide him some semblance of privacy. However, if someone chooses to do a title search, it won’t take a rocket scientist to figure out what was done and who did it.

As for asset protection, in reality, land trusts provide almost none. Land trusts do not enjoy the liability protections that corporations or limited liability companies may enjoy. Beneficiaries are held liable, which is why those who use land trusts usually name LLC's or corporations as the beneficiary.

Originally posted by David France:

an llc and insurence is what im most inclined to do for know

I think that's a great idea. Land trusts do have their benefits, but I don't think it will accomplish what you are attempting. The LLC and insurance will do just fine. You will also want to look at getting a good property manager. Here's a place to start: http://www.narpm.org/search/search-managers.htm

Originally posted by Aaron Mazzrillo:

If you want people to actually show up for your webinar, you really have to come up with some much better headlines. I couldn't imagine sitting through anything that had a title like "Operator tricks of the trade."

I did a webinar for an IRA custodian recently. The title was "Explode Your IRA by Investing in Small Mobile Home Notes". That attracted a lot of people to that webinar.

While I'm sure Bryan appreciates your advice Aaron, I don't think he was presenting his list as either "headlines" or "titles" of proposed webinars. His request was for suggested "topics" of interest.

In most states she would not, especially if she is not on the deed or mortgage. Do not have her make any of the mortgage payments. As a further suggestion, do not pay the mortgage from a joint bank account should you have one. You should be able to document that all payments were strictly from your own funds.

To be on the safe side, you should probably run this question by your real estate attorney :D