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re: Should I use an LLC/S-Corp for purchase of recreational property
Posted on 12/18/17 at 7:44 pm to snake2985
Posted on 12/18/17 at 7:44 pm to snake2985
Yes form a llc and talk to your CPA, but you are now a farmer, a tree farmer, I assume you have trees that you will one day cut and sell, you are in the tree business. Meanwhile, while you are operating your tree farm you will have business expenses, tractor, 4 wheeler, interest, property tax, insurance, mileage to and from your house to check on your farm, etc, check with your CPA and address what may be deducted
This post was edited on 12/18/17 at 7:52 pm
2
Posted on 12/18/17 at 7:54 pm to Tigerpaw123
While there are accounting things to take place, if there is a single person that owns it the LlC won't change anything as any expenses/ income would pass through on your personal return as far as I know.
The reason to do an LLC is for liability reasons, to separate yourself and your assets from the property. Given, as sole owner I'm not sure how much that truly protects you from a very good lawyer anyway.
I'm not a lawyer, but my understanding is if you are the sole owner, decision maker, and only 'employee' the LLC only does so much. It helps you if there's a liability by say a vendor or contractor or a family member doing work themselves, but as sole owner if you say decide not to repair a bridge and someone's 4 wheeler falls off and they get hurt, you can't just waive a piece of LLC paper and say nanny nanny boo boo.
But, if you hire a contractor and that contractor sucks at repairing the bridge then the LLC offers protection as they are a third party that screwed up.
The reason to do an LLC is for liability reasons, to separate yourself and your assets from the property. Given, as sole owner I'm not sure how much that truly protects you from a very good lawyer anyway.
I'm not a lawyer, but my understanding is if you are the sole owner, decision maker, and only 'employee' the LLC only does so much. It helps you if there's a liability by say a vendor or contractor or a family member doing work themselves, but as sole owner if you say decide not to repair a bridge and someone's 4 wheeler falls off and they get hurt, you can't just waive a piece of LLC paper and say nanny nanny boo boo.
But, if you hire a contractor and that contractor sucks at repairing the bridge then the LLC offers protection as they are a third party that screwed up.
This post was edited on 12/18/17 at 8:27 pm
Posted on 12/19/17 at 9:11 pm to Tigerpaw123
quote:
talk to your CPA, but you are now a farmer, a tree farmer,
Great advice.
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