Single Or Multiple Member LLC?
My wife and I would like to form an LLC to transfer our investment buy and hold properties into. For tax purposes, is a single or multiple member LLC better? Does it matter?
TYIA,
JohnCl
Maybe, maybe not. As far as your tax liability is concerned, there will be no difference if the multi-member LLC is a partnership and the single-member LLC is a disregarded entity.
If the LLC is organized as anything other than a disregarded entity (e.g., partnership or corporation), the entity will have its own tax return filing requirement.
I am a little confused, how do you determine whether a LLC is "organized as anything other than a disregarded entity"? Does this mean LLC will need to get its own tax ID#, its own bank account, and everything separate from other business and personal?
I just saw you had mentioned earlier - a single-member LLC is a disregarded entity. Does this mean single member LLC is meaning-less or useless form?
Just means that it is not a taxable entity in its own right as far as the IRS is concerned.
Establishment of the LLC is governed by your own state's law.
In this forum, I only gave you the federal income tax perspective. If you want to know which entity offers the best legal protection for your investment approach, and for questions concerning how to establish a business entity, you need to visit the Legal Forum[ Edited by DaveT on Date 11/16/2003 ]