IRS Rules LLCS are Taxed Like a Partnership

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Topics: Asset Protection


  In 1988 the IRS issued Revenue Ruling 88-76 which established that Limited Liability Companies would be taxed the same way as Partnerships are taxed, IF, they avoided having more than two corporate characteristics as identified in 26 CRF 301.7701-2,3 and 4 present in the entity. These include Centralization of Management, Free Transferability of Interests, and unlimited Continuity of Life, and Limited Liability. Most state LLC Acts attempt to achieve this.

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Small Corporations Can Provide Optimum Tax Benefits

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Topics: Asset Protection


   Trusts are great for establishing and maintaining privacy, but they either have no tax effect at all, or can be taxed at the highest rates. On the other hand, a small C-corporation can provide a dazzling array of tax benefits which can be passed through to employees in the form of tax free fringe benefits which are deductible from corporate income. Within fairly broad limits, a corporation can defer taxes through the use of fiscal year reporting and the accumulation of retained earnings. Let's see if we can conjure up an example.

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There’s No Financial Swiss Army Knife

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Topics: Asset Protection


  The Swiss Army knife contains a variety of basic tools in a tidy package. We don't have its equivalent in the world of investment. Instead we are confronted with a variety of financial tools which tend to confuse and mystify us. Like a deer along the highway caught in a car's headlight, we tend to be more dazzled by the brilliance of some schemes than enlightened. Consequently, we don't avail ourselves of the benefits that are there just for the asking. Perhaps by looking at each 'blade' in our financial Swiss Army knife, we'll be able to sort things out a little. Then we can take a quick look at the potential uses for ourselves.

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Fundamentals of Trusts

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Topics: Asset Protection


 One might think that Julius Caesar, General of the Roman armies would have been unassailable, but in those trying times, assassination and seizure were a way of life. In 51 B.C. prior to departing for the campaign in Gaul, he entrusted all his property under the terms of a contract to a Roman Senator to hold for him until he returned. If he failed to return, this assured that his family would be taken care of and provided for. Upon his triumphant return he became Emperor and incorporated the use of the Trust into Roman Law.

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42 Advantages of Using a Revocable Land Trust

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Topics: Asset Protection

Advantages of Using a Revocable Illinois "Type" Land Trust

  1. Avoids property being probated (out of court transfer upon death of beneficiary)
  2. Ease of Transferability
  3. Judgments against the beneficiary do not attach to the property
  4. No Partition (avoids spouse’s "forced share" sale buyout upon divorce)
  5. Easier management with multiple owners (multiple owners do not have to sign docs)
  6. No costs upon transferring beneficiary
  7. No registered agent needed

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Tax Reduction Ranks Near The Top In Seller Motivation

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Topics: Asset Protection, Investor Success


 The tax code is replete with timing deadlines that can be used to negotiate better terms. Section 1031 requires a seller to have identified qualified replacement properties within 45 days, and to have completed the purchase transaction within the earlier of 180 days or by the date the next tax return is due, including extensions. Many a seller who uses up all this interval shopping for bargains is eventually confronted with the prospect of either buying something, or paying taxes.

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1031 Tax-Free Exchanges For Investors

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Topics: Asset Protection, Investor Success


The first step the taxpayer must do is to review their potential transaction. Was the property held for investment or in their trade or business? Was the property held long enough? The property must be held for one year, typically at the beginning. Following properties can be held for a shorter period of time.

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Using What You Have to Get What You Need to Get What You Want

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Topics: Asset Protection, Investor Success


I have lots of land here and there that nobody but me seems to want (and I’m not so sure about me). A few days ago I was trying to buy a lot zoned for mobile homes. The seller, who was also a broker, wanted $63,000 cash, but at her price, I wasn’t interested.

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Trading Your Way to a Fortune

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Topics: Asset Protection, Investor Success


 Rarely when I hear people complain about being able to buy a house today that makes sense as a rental do I ever hear them mention using anything other than conventional bank financing. They are quick to point out, that even in the relatively low interest rate environment that we have today, the rising prices of houses has outstripped rents so far that nobody can afford to buy a house and hold it as a long term rental. This ignores the fact that the reason expensive houses aren’t feasible as rentals is because of the high leverage used to buy them. A free and clear house will cash flow.

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