Hi All!
This subject will come up within your real estate investing, and I want to give you my personal experience and how it can work for you. The question is asked as far as what is an llc, and how is it used in asset management. I personally choose to register my properties and care for them within my LLCs, which is a business structure specifically created because the tax benefits and regiments of C or S corporations were not business friendly and expensive, where as the sole proprietorship allowed total liability to any frivolous lawsuit to your personal asset. Great minds went into thinking about this structure, and its quite easy to obtain the benefits of them, so it is my personal choice.
Please choose whatever structure works with the level of protection of your personal asset as you like, and remember: Many of the insurance coverages will have a liability policy in case of lawsuit. That is to be used in conjunction with the business structure set, within the name of your business.
Having a separate business entity also gives you a little more firepower when claiming deductions to the IRS, which will be a big part of your real estate business when investing. Remember, rental income is one portion of the equation, tax deductions and tax liability exemption in your own personal paycheck (as losses/gains can pass through to you) is another important aspect of creating these structures.I will be doing more of these on the business structure, stay tuned. I am actively searching for Virginia real estate lawyers and accountants that I can speak with, to give their perspective.
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