Controlled Group/liability Protection
Hello all,
I am in the process of starting a Real Estate investment company with some family and friends. Currently we are trying to layout our entity structures that we will use to operate our company. We will not be taking any income from the company for several years because we do not want to hurt the growth of the company. We will start by flipping properties and eventually start moving that income over to rental properties for long term passive income.
Our purposed business layout has a C-Corp(Flip Corp) as a limited partner in an LP with another C-corp(GP Corp). GP Corp will be the general partner for our Rental LLC's (via various LP's) as we begin converting the flip income over to the rentals. We recognize that we will most likely be considered a controlled group, and we will forced to file taxes as one entity. However, does this also hurt our liability? For example, we want to start up new Rental LLC's to spread out our total assets so that lawsuits can not claim rights(charging orders) to all our other properties. We are thinking of only allowing ~10% of our total assets in one rental LLC at a time. (Of course this is after we own more than 10 properties. <IMG SRC="images/forum/smilies/icon_biggrin.gif"> )
As long as we keep the entities separated properly, individual bank accounts, meeting minutes, etc, can we limit our liability in this manner? Also, can anyone think of a way to get around the controlled group status for us? Currently we have 4 partners that will own equal percentages in all the companies so there does not seem to be a way around the controlled group status. Or are there any other general tax strategies we can take to maximize our profits or at least defer the taxes until future payout?
Any other general ideas for us would also be appreciated.
Thanks! [ Edited by adkinsjd on Date 11/24/2003 ]
Bump. Just wondering if anyone had any input for us.
Thanks!