If you own two vacation properties, do you have one or two LLC’s ? Our CPA says we don’t need two but I wonder if it would be difficult keeping the two separate while tracking income and expenses??
What’s a LLC? @Welovethebeach?
Just the one. That’s what was recommended to us and it seems to make more sense.
Hmmmm. Ok. Do you use one bank account then for both properties?
Limited Liability Company
Basically you get the benefits of pass-through taxation and limited liability.
I would trust your CPA, who has specific knowledge of your business, over advice from random internet strangers whose circumstances likely differ from yours. Just sayin’.
The only reason I can see to have multiple accounts would be to limit control of the funds in the accounts (i.e. different people are authorized to make withdrawals from or deposits to accounts). Things like tracking income, expenses, taxes, depreciation, etc. for each property is much easier with accounting software and doesn’t require multiple accounts.
Yes, it would be an unnecessary complication otherwise.
Thanks …it’s good when hosts are posting acronyms to remember this is an international forum
The LLCs are (usually) disregarded entities for IRS purposes so there is no need to have more EINs. I only obtained an EIN for ours as a ‘dba’ because an EIN is required in order to submit the 1099s electronically. There is no other reason I need another number besides my SSN.
It’s not technically an acronym. It’s used in all legal forms here in the US.
What about protection? Having an llc can help so that your not sued for all you own
The corporate veil is another more complicated question, but simply having an LLC is not a corporate veil.
Edited to clarify: One is a tax question. The question of the corporate veil (most often imbued to an Inc. run by a board of directors) is a legal question.
I have 3 properties, 1 LLC and 1 bank account.
Here’s a good acronym for you: LMGTFY
We have one STR and two FT rentals titled under one LLC. The LLC is owned by our revocable living trust. We have a single LLC bank account. Our insurance policies are in the name of our LLC and we are listed as additional insured on each policy.
With all of the monthly/quarterly tax filings, licensing requirements, etc. I would not want a 2nd LLC.
Can I apply for LLC even if there is a mortgage for the property?
That’s a question for a lawyer. As I understand it, the LLC wouldn’t own anything. It probably can’t own mortgaged property, because the mortgage would be for a homeowner. But I am no lawyer.
Yes, you absolutely can.
I would ask the company that holds your loan whether or not they will allow it. Ultimately, they are the ones that would have the issue with this. They may not allow it with your current loan, but they may have a different mortgage product that would work that they could provide you.