@Jil can you pls pass on your cpa information ? Appreciate it
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For those with Corps/LLC’s, are you guys holding your properties in those or do you have other kind of businesses?
All my properties are in my own name so I can get regular mortgages. Do I need to reevaluate how I hold title?
Do not hold the property title under a company. Companies has high tax structure, you see 35% corp tax+high CA tax.
Holding properties under the name is perfectly fine choice. Just keep them under a revocable trust and that is more than enough.
What about LLC?
A revocable trust is for passing the property to heirs, there is no other benefit.
Btw, after you set up a trust with an attorney, do you still need a professional to add properties to trust afterwards? Is it as simple as preparing and recording a grant deed to change title to the trust?
LLC or S-CORP or C-Corp are same company formation. No need to title it with company.
- If you want to hold the property beyond lifelong, for multiple generations, like Trump Empire, you can hold it at company name.
Generations, you pass the company to heirs or divide the shares to heirs, but hold the property in company forever.
- If you flip, better to have company, as legal challenges are linked to company, but not your personal wealth.
For small investors, moving Title to a company may not even work out.
If you have mortgage, moving title to company is considered sale and mortgage company may come after you at some point later.
Yes for both.
What kind of businesses are you using the LLC/Corp for?
Trust is best
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I do tech consulting, not real estate, with overseas partners. Company is required mainly to invoice, accounting and filing taxes.
Both are almost same. If your business income is less than 50k/year LLC is better in CA. If it is more, S-corp is better. Do some research on LLC vs SCorp.
For real estate holding, Trust is the enough and better.
What about when the corporate tax is at 15%?
Trust, you do not pay tax, while company you pay tax no matter whether you do business or not.
Trust is better.
Huh? Pass through to you to pay tax. Are you implying that LLC pays tax and you pay tax for the same income?
Pay tax on the same income once. Pass through (Trust) or itself (LLC elects not to pass through) is also paid tax once.
What is the advantage to pass through to you to pay the tax instead of the LLC paying it when your income tax is higher than 15%?
My attorney is charging $100 per CA property to put into trust and $300 per non CA property …anyone think that is high or have a better insight ? Any attorneys here ?
When i set up the trust, these are done as part of setup, no itemized cost.
When i re-finance, lender took out and put back into trust, absorb by lender, so cost me “nothing”.
When I buy a new property, the buyer is already the trust, so no “put into” trust cost.
Sound like you set up a trust without including those properties, and now want to put them in?
Why not just set up an LLC, and have the LLC controlled by the trust? No setup fee needed. But of course, LLC needs to pay that $800 annual tax…
If there is current mortgage with the property, assigning to LLC results “Due on Sale” clause by lender as well as county sales, then reset property tax calculations. How lender will come to know the sale of property to LLC? When lender changes the service provider or resale the service to some other providers, MERS database is checked with country records that will start the issue of “Due on Sale”.
Otherwise, if profit is less than 50k, LLC is better; if more than 50k, S-Corp is better.
If there is some preparation charges for Trust creation, say $750 or $1000, then it looks to me $100 nominal charge for CA property, higher for $300 per non CA property. It depends on what they do? Normally, they fill up all documents, ask you to sign and submit to respective county with your check for recording charges. In that case, their work is same either CA or non-CA property.
Oh… in that case it’s better to buy the properties with an LLC right off the bat…
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Can you include non-CA property in a CA revocable living trust?
Yes. Have been putting Austin rental SFHs in the living trust.