All Forum Posts by: Jose Bu

@Steve Morris it's one of the exemption the single member LLCs have in TN from franchise and excise tax.

FONCE - family owned non corporation exemption

https://www.tn.gov/revenue/taxes/franchise---excise-tax/exemption---fonce.html

@Chuck Kramer Thanks Chuck, so far closing in my name looks like the best option. Will be getting high liability insurance as well.

Figured more Tennessee investors would be here to help out.

I'm trying to see if anyone as the owner of rental real estate property in their LLC has had luck in getting the FONCE exemption ?

Basically I'm looking to buy property in Gatlinburg and will be renting it out to another company who will be doing Short term rental with that property. My lender has given me the option to either close in the name of the LLC or my personal name. I would like to close in the name of the LLC for extra liability protection as the owner, however LLC's are subject to TN franchise and excise tax unless they apply for one of the exemptions. FONCE is one of the exemptions that my Single member LLC falls into, since its only collecting passive rent income. I'm trying to get an idea if investors have had luck in getting FONCE approved for their single member LLCs.

Hope I can get some answers directly from investors here.

Thanks, appreciate any help.

Sorry accidentally posted it twice in the same forum, no idea how to delete the duplicate discussion. 

I'm trying to see if anyone as the owner of rental real estate property in their LLC has had luck in getting the FONCE exemption ?

Basically I'm looking to buy property in Gatlinburg and will be renting it out to another company who will be doing Short term rental with that property. My lender has given me the option to either close in the name of the LLC or my personal name. I would like to close in the name of the LLC for extra liability protection as the owner, however LLC's are subject to TN franchise and excise tax unless they apply for one of the exemptions. FONCE is one of the exemptions that my Single member LLC falls into, since its only collecting passive rent income. I'm trying to get an idea if investors have had luck in getting FONCE approved for their single member LLCs.

Hope I can get some answers directly from investors here.

Thanks, appreciate any help.

I'm trying to see if anyone as the owner of rental real estate property in their LLC has had luck in getting the FONCE exemption ?

Basically I'm looking to buy property in Gatlinburg and will be renting it out to another company who will be doing Short term rental with that property. My lender has given me the option to either close in the name of the LLC or my personal name. I would like to close in the name of the LLC for extra liability protection as the owner, however LLC's are subject to TN franchise and excise tax unless they apply for one of the exemptions. FONCE is one of the exemptions that my Single member LLC falls into, since its only collecting passive rent income. I'm trying to get an idea if investors have had luck in getting FONCE approved for their single member LLCs.

Hope I can get some answers directly from investors here. 

Thanks, appreciate any help. 

Were you ever able to get the FONCE exemption ? I'm in the process of closing on a STR property in Gatlinburg and wanted to know if anyone had success with the FONCE exemption.

@Luke Carl I will also post it in a bigger discussion post, but I wanted to know whether STR properties who closed in the name of LLC were actually getting the FONCE exemption or were they paying the 6.5% franchise and excise tax. I know there is no income tax in TN however they have this 6.5%F&E tax if you are a LLC, or corporation doing business in the state. Also spoke to a few CPA's and got conflicting information that's why I'm trying to get information directly from the investors here. Let me know if u have a reliable CPA who deals with FONCE and I will contact them as well. Appreciate any help I can get.

@Josh Madigan Hey josh I was leaning towards the FONCE exemption. That would give me some additional liability protection as well as minimize F&E taxes.

And I actually wanted to see whether someone here who actually closed in the name of the LLC was able to get the FONCE exemption when holding the STR?

My lender is willing to close our Gatlinburg STR property in my personal name or in the name of my LLC. I would love to close in the name of my LLC to have less liability. But If I close in the name of the LLC then TN charges a 6.5% Franchise and Excise tax (6.25% on net income and 0.25% on book value of the property annually ) which would be a significant amount.

My wife will be running the Operations (Airbnb, VRBO, etc) through a separate LLC which will be paying me a monthly rent as passive income.

Please let me know your thoughts and any advice on how you have minimized the impact of franchise and excise tax on your properties? 

I know there are certain exemptions such as FONCE but has anyone had any luck in getting approved for any of these exemptions ?

All help appreciated