All Forum Posts by: Sean Salazar
Sean Salazar has started 1 posts and replied 2 times.
Post: Property in personal name but rental agreement via LLC?
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I have a property with an accessory apartment (I live in the main house) and 2 investment homes that I want to rent out... the properties are in my personal name but I want to make the rental agreement with three seperate LLC's that are subsidiaries of a NYS S-corp that is taxed as personal so everything would flow to a schedule E, so im not doing this for liability purposes but to streamline banking and record keeping processes on each property. I have mortgages on all the properties and the lenders will not allow a title transfer to LLC's even if personally guaranteed.
Since I cannot transfer title to LLC I have $1MM liability on each homeowners policy and they know I will be renting. I would like to add another $3MM personal umbrella. All of the leases have indemnification clauses but I would like to protect my assets as best as I can with this structure as it is. (yes I learned my lesson and will purchase the next property differently)
My question is....will the my personal umbrella insurance protect me personally in the event of a loss related to the rental in excess of the homeowners policy if the lease and the rent is collected by the LLC. The umbrella policy specifically has no endorsements for "business activities" and the properties are located in New York. Would this be considered a "business activity" if I use the LLC?
Post: Collect rent under an LLC if I own the property personally?
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Is it required to transfer title to the child LLC or can the property stay in your personal name with this structure?
Best,
Sean
Originally posted by @Scott Smith:
Cathie,
The parent LLC's common ownership doesn't leave assets vulnerable. Each child LLC is compartmentalized for liability reasons.
Only ONE Schedule E is required, and that would be for the parent LLC.
Your last questions depend a lot on your personal circumstances and current set-up. You may very well need an attorney who is more qualified in this area to help simplify your property and tax situation while keeping your assets protected. Feel free to inbox me if you have more details to add or questions. Hope this helps!
Originally posted by @Cathie Kovacs:
@Scott Smith doesn't having common ownership (the parent LLC) leave all the assets of the parent exposed when one of the child LLCs gets sued?
How many Schedule Es are required under the Series LLC structure? One for the parent (in summary for all children?) or separate ones for each child?
I consulted with a tax attorney last week about how to simplify the "separate LLC for each property" matter and a Series LLC was not suggested. Sounds like I might need a better attorney. I'm looking to avoid having 10 different bank accounts (1 for each LLC/property) because life is already complicated enough, right?