Quote from @Phyo Ko:
Hello everyone,
I am in the market for a new CPA to help me with setting up business structure and prepare for my tax return next year. I have talk to a couple of different companies but all of them left me feeling over sold and not in good hands. I am hoping to get a unbiased opinion to see if I am just being overly cautious.
I am currently in military stationed in CA and will be moving to FL end of the year. I have a duplex that's rented out right now and a SFH that I plan to start renting out Jan24. I plan to get my real estate license in FL while I get into fixing and flipping in fl. I want to set a good structure in place for my properties in CA and what I plan to do in FL. Also I want to set up LLC for my wife who has a side business that picking up a lot of traction.
The CPA I have talked to have recommended different approaches on how I should set everything up. One has me putting the CA properties into a LLC with a WY holding LLC owned by a Living Trust then a separate LLC holding company for me and my wife business. Another one has me placing my CA properties into statutory trust-LLC-Land-Wy holding LLC- Living trust and me and my wife separate LLC with a LLC holding company taxes a C corp. I am lost with all the different holding company and trust do I really need all of this complexity? Do I really need a Wyoming LLC, statutory trust and etc? Can I just by with a LLC for my two rental and two llc for myself and my wife? I am still taking my first step I feel like this is over kill. Thank in advance for any advice.
So that organizational structure is going to cost how much up front, and how much each year in time and money. They didn't mention the idea of opportunity costs, because I want you to add those amounts up and brainstorm all the ways you can never spend it once you commit.
Ask them how much it will cost to make sure that living/revocable trust will cost to structure so when it becomes irrevocable all transfers are carried out correctly. Estate attorneys are not ****ing cheap.
Ask them how many separate bank accounts that will require, and how much separate accounting it will require to prevent commingling of funds and piercing of the veil.
I want you to ask them if you could accomplish the same transfer with a Joint Tenancy in Common WROS (With Rights of Survivorship), if they say yes, ask why they didn't suggest that instead, or tell you it's likely under state law all your assets are getting transferred to your wife anyways, for ****ing free.
Ask them how an active trade or business can be a holding company? What is it holding? No offense but holding companies often serve purposes like finance acquisition or management services for affiliates.
Dude honestly I read the second scenario and it was so dumb I honesly have to pass. You and your wife have separate LLCs? Ask them if that creates a partnership under Federal or state tax law. Tell me their answer because whatever they say will not be based on Luna, 301.7701, 7701, or anything that resembles someone who won't give you a blank stare before pretending to know.
Remember, taxes are a hidden value good/service. That means when you pay me, truthfully, you don't have the skillset to tell me whether or not I did a good job, and they know it.
