This episode explores the use of LLCs in real estate businesses and their impact on taxes. They discuss the benefits of LLCs in protecting assets and minimizing liabilities. The episode also covers the challenges of using LLCs, such as financing issues and potential impact of rising interest rates on mortgages transferred to an LLC.
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question_answer ANECDOTE
The Midwest Investor Story
A Midwest real estate investor with a $3 million portfolio faced a lawsuit due to his son's car accident.
His assets were exposed because he lacked an LLC, highlighting the importance of entity structuring for asset protection.
volunteer_activism ADVICE
LLCs: A Necessary Cost
Treat an LLC as a necessary business expense for asset protection.
Establish an LLC to protect your business from personal liabilities, especially if you have children.
volunteer_activism ADVICE
LLC Strategies for Landlords
Tailor your LLC strategy to your risk tolerance.
Consider LLCs per property, state, investor, or investment group, especially if you're a landlord.
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Today's show focuses on whether or not you should use LLCs as an investor or a flipper. We start off with a crazy story which we hope none of you ever have to personally go through and we then follow it up with a tax and accounting look at how LLCs affect your business.
Specifically, we discuss:
- How an LLC affect your tax situation;
- Why some flippers open and close an LLC per flip;
- What the cost implications of partnerships and S-Corps are.
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The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests.
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Tax Smart Real Estate Investors Podcast