The Hidden Benefits Of Buying Property With A Florida LLC

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Without question the Limited Liability Company has become the most popular business form for small and growing business throughout the United States. Because of its tax benefits, flexibility, lack or required formalities, and personal legal liability protection from business debts and liabilities, it has surpassed the Corporation as the entity of choice. Whether you are starting a new business or growing a current business choosing an LLC over an Inc. is an obvious choice. Something else to consider is location. We have all heard the ads to "set up your Nevada Corporation". Have you ever wondered what that is all about? What makes Nevada such a popular place to Incorporate? Well, the laws in Nevada are set up to allow the corporation to hide the shareholder information. Add to that the fact that Nevada does not have a State income tax, and the answer to the Nevada conundrum is easy. Privacy and tax savings. Wow that was easy.

But wait, this article began by discussing the fact that the creation of LLC's is greatly outpacing the creation of new Corporations. What can the discussing of LLC's popularity and the discussion of the fact that Nevada has historically been the most popular place to for a corporation possibly have in common? The answer is Privacy. Whether or not a state allows a corporation to hide shareholder information is completely irrelevant to the creation of and LLC-THERE ARE NO SHAREHOLDERS IN AN LLC---ONLY MEMBERS. And guess what, in most states you do not have to identify the members to create a valid LLC. Hence, in every state, LLCs offer the same privacy as a Nevada Corporation. Okay fine, but what about tax savings? If the company is created in a state with no state income tax, such as Florida, then the Florida LLC will give you all of the benefits of the notorious Nevada Corporation, plus give you more flexibility and fewer "corporate formalities" than a traditional Corporation.

Imagine this: Your Florida LLC owns rental property in Georgia. You have a buyer for the property. If you sell the property you will pay federal and Georgia state tax on the gain. If, however, you sell the Florida LLC to the buyer, you will only be subject to the Federal tax. The interest in the LLC is considered personal property located in Florida, so Georgia can not impute a tax. This, along with spreading risks is why savvy real estate investors will often create a separate LLC for each investment property they own.

If your business is not in Florida, you can still have a Florida LLC created for your business, you may have to register the LLC in the state of your business operations as a Foreign Company. However, if the only business of the LLC is that it owns investment property, it may not be required to register the company in your home State. A document processing company creating LLCs and Incs from a software program will not be able to help you understand the requirements and restrictions, and are not allowed to give you legal advice. You will want to have your LLC created by an experienced law firm.

The creation of your legal entity is unquestionably providing a legal service. Please contact LegalCreation or visit www.LegalCreation.com for more information.

 

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