Just starting out and would like to know if I should registure as a D.B.A or not, plane on some rentals some rehaps…thanks for the help
What will you gain by operating a couple of rental properties as a DBA?
What will you lose by not having a DBA?
I suspect the answer to both questions is – nothing.
thanks david, how do i do buisnees under my name? do i name my business rozela properties or something like that and just put it on everything b/cards letter heads and so on
If you want to name your rental property operation Rozela Properties, and operate as a sole proprietor, you just file a DBA registration with your state Secretary of State, or the agency for your state that handles business registrations.
Then, just behave as though you are Rozela Properties with your brand on everything related to your rental business – letterhead, business cards, leases, contracts, advertising, telephone listing, etc.
Should I considor a corp. or something if im just going to do rentals and some flipping,what are your thoughts and thanks for the reply
The consensus of legal opinion is to keep your rental property activities separate and in a different business entity from your flipping activities.
The property flipping activity is an active income business, while a rental property activity is a passive income business. The profit from your active income, property flipping business is taxed as a dealer disposition and may also be treated as self-employment income. None of the tax advantages that accrue to investment income are available to you.
Profits from a passive income activity enjoy investment income tax treatment which means capital gains tax rates apply, 1031 tax deferred exchanges are available to you as are installment sale tax treatments. During your holding period, depreciation expense is allowed. Since rental property operation is a passive income activity, self-employment income taxes are not a factor.
The popular suggestions are to conduct your rental property operations in an LLC (partnership or disregarded entity) to preserve all the advantages and benefits of passive income and investment property tax treatments, whereas your flipping activity should be conducted from within an S-Corp.
In this business structure, you have two separate business entities, two sets of books, and two separate business bank accounts. In the event of a lawsuit arising out of one of your business activities, only the assets held by that entity are at risk. The entity shields your personal assets from liability exposure.
Thanks David this realy helps and I apprisiate you putting it in terms I could understand I’m going to look into setting these 2 seperate entities up before I get to involved, to protect me in the future. once again Thank you very much…