This panel will include discussions on taxes and legal with a attorney, CPA, and 1031 expert. Please submit a question for the speaker or suggest a topic that you would like them to discuss.

One thought on “Tax & Legal”

  1. Hi, can someone please address holding residential rental properties in LLC? Sorry, this is detailed, but I seem to hear this discussion frequently and have several unanswered questions.

    1. Is it better to put multiple properties into a series LLC or separate LLC’s or use an equity stripping setup? What are the differences, such as liability protection, cost, taxation, flexibility to make changes, insurance, and commingling of funds?
    2. From your experience, how often has an LLC protected an owner beyond what a PUP would have done? Or, how often are owners sued for amounts that exceed traditional liability coverage or events that are not insured?
    3. Should an LLC still add a PUP?
    4. If I am at fault in a big automobile accident and am sued for a massive amount and hold property in LLC, can the claimant still sue for my property? I.e. if I hold property in an LLC, am I protected from other personal lawsuits?
    5. Similar to #4, if I hold property in LLC, in what ways can the veil of liability be pierced such that I’m still personally liable, e.g. commingling of funds, poorly structured LLC, auto accident, and other lawsuits?
    6. What is the best way to transfer an existing property into LLC, such as warranty deed, quitclaim deed, etc?
    7. If I transfer a property to LLC and I have a mortgage, how much of a risk is the Due on Sale clause that allows the lender to make my outstanding principal due? How often do you see this invoked, and do you think it will happen more as interest rates climb? Do lenders ever approve of the LLC transfer? Would I have the option to transfer the property back to myself in lieu of paying off the loan if the clause is invoked?
    8. If I transfer a property to LLC after a lease has been signed between a tenant and myself, do I need to sign new leases between the tenant and the LLC, or is a written notification sufficient?

    Thanks!

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