Using Limited Liability Company for Rental Properties Is Quite Advantageous
Integrating a Limited Liability Company (LLC) provides many advantages and protections in legal, tax and management flexibility to all rental property owners.
FORT LAUDERDALE, July 1, 2015 (Newswire.com) - The Internal Revenue Service ascertains that Limited Liability Company business arrangement is extremely popular as it is a mix of a corporation and a partnership which offers the advantage of both. These kind of business provides limited personal liability for the activities and debts of the LLC to its members.
All property owners have the same goal of maximizing their rent income and minimizing expenses and liabilities. And in this common aim, LLCs help them protect their personal assets while allowing them to gain some tax advantages. Consulting with a legal or tax adviser or seeking asset protection services seems highly important these days for researching state specific laws and keeping the LLC property secured.
There are many legal advantages also that are linked with LLCs. One of which is personal property protection. Rental owners with multiple properties have benefited the most for maximizing asset protection. According to experts every single investment property must have its own LLC, as this would save all the others investment properties in case the property owner is sued for a particular LLC. It is considered that LLC is an alternate form of insurance as it safeguards the personal assets from certain legal claims like contractual tenant disputes and slip-and-fall cases.
Organizational benefits are also quite worthy for LLCs. Landlords could stay organized and treat their rentals as a business because this type of businesses separates them from personal records. Bank accounts are also created in the name of the LLC, which is separate from the personal accounts of the owner. One of the tax advantages of an LLC is the capability to use pass-through taxation. They also help in avoiding double taxation as there is no separate LLC tax.
People around the world with multiple rental properties are most inclined towards opening LLCs for their assets. According to them the best way to protect rental properties is to hire a property manager or some asset protection services and make sure they are properly insured.