I have heard that it is good to put each of my two rental properties into a land trust. Then have an LLC become the beneficiary of both land trusts. Well, I already have an S-corp. Instead of creating a new LLC and have to pay yearly dues for that LLC, can’t I just make my corporation the beneficiary?
If I have to create an LLC, does that mean the LLC will be the entity that has to file taxes for all of the rental income and the expenses of the property?
Can you explain what you accomplish by creating a trust for each rental property and then making your corporation a beneficiary of the trust (in effect your corporation inherits the rental property when you die) when the grantor (you) die. Is there some advantage that I am missing here.?
As to the tax return question, the answer depends upon how your LLC is treated for tax purposes. If the LLC is a partnership or a corporation, then the LLC has to file either a partnership or a corporate tax return. If the LLC is a (single member) disregarded entity, then the rental income and expenses are reported on the member’s personal 1040 (Sschedule E) as if the LLC did not exist.
From my experience the corporate structure is extremely important but also based on your strategy as an investor and taxpayer. I would consult with someone who is qualified on asset protection strategies, taxes, and of course understands what you are trying to accomplish. I only trust people with proven track records and who have helped others successfully.
Good Luck.
typically people use a LLC as the trustee as that is who is listed in the public record.
what else has the S-corp done? If it’s ever been used – and therefore subject to some potential future litigation – I would consider it contaminated and not use it. For a few hundred bucks you can have a brand new clean & shiny entity.
The only purpose of the trust/LLC arrangement is that it (supposedly) provides asset protection by disguising the true owner of the property behind the trust veil. In this day and age it is highly unlikely that your identity would remain hidden long…
Regardless, your understanding is a little flawed. The LLC would be the trustee and you would be the beneficiary. The beneficiary is not recorded in the public record.