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LLC? (by Rich [CO]) Mar 19, 2009 4:54 PM
       LLC? (by James [MA]) Mar 19, 2009 5:34 PM
       LLC? (by Susan [CO]) Mar 19, 2009 6:01 PM

LLC? (by Rich [CO]) Posted on: Mar 19, 2009 4:54 PM

State Specific Question About: COLORADO (CO)

I have 3 SF rental houses. Is it worth it to become an LLC? I understand there are tax benefits and liability benefits.

If anyone has experience or knowledge of these, please let me know the benefits and how to go about becoming an LLC? Is this something I can do myself? Just file some forms? Or is it more complicated than that.



LLC? (by James [MA]) Posted on: Mar 19, 2009 5:34 PM

It's much more complicated than filing some forms. There are no tax benefits since an LLC is tax neutral. There are not liability benefits if you manage the property and make repairs.

LLC? (by Susan [CO]) Posted on: Mar 19, 2009 6:01 PM

Using a corporate entity is definitely a huge advantage to protect your asset for you and from you. If something terrible happens ... that either exceeds or is not covered by insurance, a lawsuit winner could get your equity in one house or in everything in your name. Asset protection of your hard work is the #1 reason to place properties in LLCs. There are some tax advantages to having a LLC as a separate business because it is a business. Some of the things you can do is write off the cost of having the annual meeting required by corporate law. Your company can require you to attend such meetings in awful places like Alaska, the Cayman Islands, or wherever it deems appropriate. Also, as a business, you can pay yourself a salary (under self-employment rules, you can end up paying alternative minimum taxes, anyway, so why not pay a small salary anyway and get other benefits.) Your company can pay for legitimate expenses like health insurance, self-employed retirement programs, etc. There are actually many ways to write off legitimate expenses ... just be careful to be fair and clear on company policies.

Try to write off some of these things on a schedule C and get audited.

Search the web for more information, talk to your CPA and RE attorney, and check out Bill Bronchick (a CO attorney) at or become a member of the Colorado Association of Real Estate Investors (CAREI).

Subject: RE: LLC?
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