OfflineI’ve been fortunate during my real estate investing in that I’ve surrounded myself with a great “Power Team”. I have a Real Estate Attorney who is also a CPA that has set up over a dozen different business entities over the years I’ve been working with him.
I know how to invest in real estate, BUT I don’t know what I need to do in order to properly protect myself and give myself the best tax deductions … that is why
I pay to have that done!
Stephanie AuWerter recently wrote an article for CNNMoney.com that discussed this topic.
“The main reason to set up an entity like a corporation is to protect your personal assets against a lawsuit -- say, if someone gets injured on your property.
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Instead of incorporating, though, Richmond real estate attorney Katja Hill suggests you set up a limited liability company, or several LLCs, to hold your properties. LLCs are easier to maintain, she says, than the "S corp" corporate structure that's also used by small businesses. Related: Finding financial planning professionals. A lender may make it hard for you, however, to move a mortgaged property to an LLC. A transfer might also trigger a tax hit. In both cases, the best fallback for shielding assets is umbrella insurance. In fact, even with an LLC, Hill advises getting a policy to be extra safe.”
http://money.cnn.com/2013/10/18/pf/expert/real-estate-investing.moneymag...
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Drew,
Great advice given here. I agree with what you stated. I have been an investor for over 8 yrs. and have had my corporation from the beginning. It has helped me make money as it has saved me in taxes and protected me against any lawsuits. The lawsuits I can honestly say are very rare but the peace of mind knowing I am personally protected is humbling. I suggest everyone get a good real estate attorney and accountant, very important to keep your business profitable.
Thanks,
Shah Ali