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Author Topic: LLC or Inc. and what state?  (Read 2555 times)

Offline Entrepreneur

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LLC or Inc. and what state?
« on: March 21, 2014, 10:42:13 AM »
What are the advantages of one over the other?
What state should they be made in and why?
I currently live in NY.

Thanks
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Offline churnbabychurn

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Re: LLC or Inc. and what state?
« Reply #1 on: March 21, 2014, 10:43:10 AM »
Quote from: Entrepreneur on March 21, 2014, 10:42:13 AM
What are the advantages of one over the other?
What state should they be made in and why?
I currently live in NY.

Thanks
corporations are taxed.
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Offline notanonymous

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Re: LLC or Inc. and what state?
« Reply #2 on: March 21, 2014, 10:47:54 AM »
Quote from: churnbabychurn on March 21, 2014, 10:43:10 AM
corporations are taxed.
Everyone is taxed.  ;-)
I think what you mean to say is that a C-Corp pays corp income taxes, while a S-corp passes through any income to the shareholders 1040, using a 1120-S.
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Offline notanonymous

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Re: LLC or Inc. and what state?
« Reply #3 on: March 21, 2014, 10:49:39 AM »
Quote from: Entrepreneur on March 21, 2014, 10:42:13 AM
What are the advantages of one over the other?
What state should they be made in and why?
I currently live in NY.

Thanks
If you do not have a partner, and only need the liability protection, an LLC is probably easiest.  An S-corp would give you the same protection, but "officially" you need to keep minutes, corp records, etc.
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Offline notanonymous

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Re: LLC or Inc. and what state?
« Reply #4 on: March 21, 2014, 10:50:33 AM »
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Offline yid

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Re: LLC or Inc. and what state?
« Reply #5 on: March 22, 2014, 10:57:55 PM »
Quote from: Entrepreneur on March 21, 2014, 10:42:13 AM
What are the advantages of one over the other?
What state should they be made in and why?
I currently live in NY.

Thanks
Also depends what business your in- ie real estate should always be in llc.
llc has publication requirement which makes it more expensive to start up.
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Offline JunkYardUnz

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Re: LLC or Inc. and what state?
« Reply #6 on: March 22, 2014, 11:11:15 PM »
Why should real estate always be in a LLC (I am assuming you refer to partnerships as LLC's. I am sure you realize an LLC can be structured for taxes as anything) ? I have heard that saying a fed times but I never understood why.
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Offline henche

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Re: LLC or Inc. and what state?
« Reply #7 on: March 22, 2014, 11:12:34 PM »
Quote from: JunkYardUnz on March 22, 2014, 11:11:15 PM
Why should real estate always be in a LLC (I am assuming you refer to partnerships as LLC's. I am sure you realize an LLC can be structured for taxes as anything) ? I have heard that saying a fed times but I never understood why.

You can choose to be taxed a partnership or as a corporation. The default is a partnership.
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Offline yid

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Re: LLC or Inc. and what state?
« Reply #8 on: March 22, 2014, 11:18:27 PM »
Quote from: JunkYardUnz on March 22, 2014, 11:11:15 PM
Why should real estate always be in a LLC (I am assuming you refer to partnerships as LLC's. I am sure you realize an LLC can be structured for taxes as anything) ? I have heard that saying a fed times but I never understood why.
complicated - if transferring/ shuffling a property around- are transfers that under an llc partnership default will have no tax effects but as s corp will trigger taxes.
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Offline yitzf

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Re: LLC or Inc. and what state?
« Reply #9 on: March 22, 2014, 11:20:16 PM »
Quote from: JunkYardUnz on March 22, 2014, 11:11:15 PM
Why should real estate always be in a LLC (I am assuming you refer to partnerships as LLC's. I am sure you realize an LLC can be structured for taxes as anything) ? I have heard that saying a fed times but I never understood why.

http://www.forbes.com/sites/anthonynitti/2014/01/28/tax-geek-tuesday-why-you-should-never-hold-real-estate-in-a-corporation/
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Offline Aaaron

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Re: LLC or Inc. and what state?
« Reply #10 on: March 22, 2014, 11:43:23 PM »
Quote from: yitzf on March 22, 2014, 11:20:16 PM
http://www.forbes.com/sites/anthonynitti/2014/01/28/tax-geek-tuesday-why-you-should-never-hold-real-estate-in-a-corporation/

That's only looking at the tax perspective.  From a liability or asset protection perspective you should ALWAYS own RE thorugh a corporate entity.
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Offline churnbabychurn

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Re: LLC or Inc. and what state?
« Reply #11 on: March 22, 2014, 11:47:10 PM »
Quote from: Aaaron on March 22, 2014, 11:43:23 PM
That's only looking at the tax perspective.  From a liability or asset protection perspective you should ALWAYS own RE thorugh a corporate entity.
Limited liability companies are there to limit liabilities.
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Offline notanonymous

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Re: LLC or Inc. and what state?
« Reply #12 on: March 23, 2014, 12:07:12 AM »
Quote from: churnbabychurn on March 22, 2014, 11:47:10 PM
Limited liability companies are there to limit liabilities.
+1 FWIU, llc and c-corp have the same limits and protection of personal assests.

eta - I meant to say s-corp, but of course 'c' as well.
« Last Edit: March 23, 2014, 01:18:26 AM by notanonymous »
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Offline henche

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Re: LLC or Inc. and what state?
« Reply #13 on: March 23, 2014, 12:34:49 AM »
or a REIT
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Offline Entrepreneur

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Re: LLC or Inc. and what state?
« Reply #14 on: March 24, 2014, 09:12:30 PM »
How about the state to declare in?  Is that separate from deciding to go with LLC or Corp, or is it dependent on that decision?

Thanks
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Offline notanonymous

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Re: LLC or Inc. and what state?
« Reply #15 on: March 24, 2014, 10:11:28 PM »
Quote from: Entrepreneur on March 24, 2014, 09:12:30 PM
How about the state to declare in?  Is that separate from deciding to go with LLC or Corp, or is it dependent on that decision?

Thanks
If it was a c-corp, it would matter for state corp taxes.  Otherwise, as gfar as liability protection, AFAIK (I am neither an accountant or lawyer) the protection will be the same from state to state.  Another possible reason to choose one state over the next, is if someone has already incorporated with the name you want to use in one state.
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Offline churnbabychurn

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Re: LLC or Inc. and what state?
« Reply #16 on: March 24, 2014, 10:14:08 PM »
Quote from: notanonymous on March 24, 2014, 10:11:28 PM
If it was a c-corp, it would matter for state corp taxes.  Otherwise, as gfar as liability protection, AFAIK (I am neither an accountant or lawyer) the protection will be the same from state to state.  Another possible reason to choose one state over the next, is if someone has already incorporated with the name you want to use in one state.
llc are state designations. As such laws and regs may vary from state to state but generally they do not. 
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