Comments on: What an LLC does – and doesn't – protect http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/ Editors from FSB magazine answer your pressing small-business questions. Thu, 05 Nov 2009 16:07:19 +0000 http://wordpress.com/ hourly 1 By: Lexi, Sacramento, CA http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/#comment-1965 Lexi, Sacramento, CA Thu, 03 Sep 2009 04:14:53 +0000 http://askfsb.wordpress.com/?p=394#comment-1965 If your in sales these 4 sites might help you www.agentbuilderinc.com has great resources www.insuranceagentwebdirectory.com put your link their for free http://twitsurance.shoutem.com this is like twitter but just for insurance professionals and them www.agentzoo.com great insurance articles. By far these are the best insurance sites besides this one that I can find. If your in sales these 4 sites might help you
http://www.agentbuilderinc.com has great resources
http://www.insuranceagentwebdirectory.com put your link their for free
http://twitsurance.shoutem.com this is like twitter but just for insurance professionals
and them http://www.agentzoo.com great insurance articles.

By far these are the best insurance sites besides this one that I can find.

]]> By: Bill, Phoenix Arizona http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/#comment-830 Bill, Phoenix Arizona Fri, 08 Aug 2008 15:24:02 +0000 http://askfsb.wordpress.com/?p=394#comment-830 You may not be able to deduct any mortgage interest as a regular business expense. Assuming you have a mortgage on the properties; did you transfer the note into the LLC. You probably did not; therefore, since the LLC does not have any legal liability to pay the mortgage; you cannot deduct any interest expense against the rental income. The interest would be classified as investment interest and put on Schedule A, subject to investment interest limitations. In short, your income tax bill just went way up. Generally, I find that most people do not understand corporations or LLC's at all. In Arizona, just about anybody can set up the LLC, corporation, etc; what they don't do is ensure that the LLC's title to assets is valid and receives the LLC liability protection and they don't evaluate all the taxation ramifications. Pay the money - get a lawyer to draft up the LLC or corporation and ensure the assets and liabilities are properly titled; engage a CPA for your taxes. By the way, most people estalish a corporate entity for tax purposes; when in reality it's for legal reasons. Do all this before starting the business. As part of the process - what is your exit strategy from the business. You may not be able to deduct any mortgage interest as a regular business expense. Assuming you have a mortgage on the properties; did you transfer the note into the LLC. You probably did not; therefore, since the LLC does not have any legal liability to pay the mortgage; you cannot deduct any interest expense against the rental income. The interest would be classified as investment interest and put on Schedule A, subject to investment interest limitations. In short, your income tax bill just went way up. Generally, I find that most people do not understand corporations or LLC's at all. In Arizona, just about anybody can set up the LLC, corporation, etc; what they don't do is ensure that the LLC's title to assets is valid and receives the LLC liability protection and they don't evaluate all the taxation ramifications. Pay the money – get a lawyer to draft up the LLC or corporation and ensure the assets and liabilities are properly titled; engage a CPA for your taxes. By the way, most people estalish a corporate entity for tax purposes; when in reality it's for legal reasons. Do all this before starting the business. As part of the process – what is your exit strategy from the business.

]]> By: Tom, Long Island, NY http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/#comment-799 Tom, Long Island, NY Tue, 29 Jul 2008 15:52:44 +0000 http://askfsb.wordpress.com/?p=394#comment-799 You MAY have violated the Mortgage Co's loan agreement by flipping the DEED from your personal name into an LLC which could trigger a "Due On Clause" from the Mtg Co. Simply put, they COULD demand payment in full at that point. But as long as I've been doing RE investing, I've NEVER once heard of any Mtg Co actually doing this. The problem you MAY encounter is if something should happen to this investment property such as , Flood, Wind Damage, Fire, etc. If the property were damaged or destroyed, the Insurance Co COULD, and probably would, refuse to pay out any claim if you purchased in your personal name and flipped into an LLC and left the Ins in your name. You must make sure that the Ins follows the name on the Recorded Deed. You MAY have violated the Mortgage Co's loan agreement by flipping the DEED from your personal name into an LLC which could trigger a "Due On Clause" from the Mtg Co. Simply put, they COULD demand payment in full at that point. But as long as I've been doing RE investing, I've NEVER once heard of any Mtg Co actually doing this. The problem you MAY encounter is if something should happen to this investment property such as , Flood, Wind Damage, Fire, etc. If the property were damaged or destroyed, the Insurance Co COULD, and probably would, refuse to pay out any claim if you purchased in your personal name and flipped into an LLC and left the Ins in your name. You must make sure that the Ins follows the name on the Recorded Deed.

]]> By: Sam Mesa AZ http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/#comment-777 Sam Mesa AZ Mon, 21 Jul 2008 04:22:33 +0000 http://askfsb.wordpress.com/?p=394#comment-777 You also violated your loan agreement as I assume you QUick Claimed the property out of your personal name and into an LLC. You also violated your loan agreement as I assume you QUick Claimed the property out of your personal name and into an LLC.

]]> By: Josh, Charleston, SC http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/#comment-773 Josh, Charleston, SC Sat, 19 Jul 2008 20:03:09 +0000 http://askfsb.wordpress.com/?p=394#comment-773 Insurance can be a vital tool in preserving the "limited liability" aspect of your LLC. Failing to have enough cash in the coffers, or insurance coverage on-hand, to satisfy any claims against the LLC could lead a court to disregard the protections of the LLC and view the entity simply as an extension of its members. The LLC's members would be on the hook for any liabilities just as if you ran the business as a sole proprietership or partnership. Insurance can be a vital tool in preserving the "limited liability" aspect of your LLC. Failing to have enough cash in the coffers, or insurance coverage on-hand, to satisfy any claims against the LLC could lead a court to disregard the protections of the LLC and view the entity simply as an extension of its members. The LLC's members would be on the hook for any liabilities just as if you ran the business as a sole proprietership or partnership.

]]> By: Becky Young, Phoenix, AZ http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/llc-protections/#comment-771 Becky Young, Phoenix, AZ Fri, 18 Jul 2008 15:55:36 +0000 http://askfsb.wordpress.com/?p=394#comment-771 Most of the time, when you transfer real estate (ex. to your LLC) without paying off the note, you give your title insurance company a loophole against any future claims. Most of the time, when you transfer real estate (ex. to your LLC) without paying off the note, you give your title insurance company a loophole against any future claims.

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