Land Trusts vs. LLC's - Posted by Mark A. Nyman

Posted by on January 27, 2000 at 10:59:53:

Not versus, but addition to. If you need to buy in your own name, do so, but after closing you can transfer title to a land trust. Then, transfer your beneficial trust interest to an LLC. The end result is the trust owning the property with your LLC being the beneficiary of the trust, you being the member of the LLC. This does not change your tax reporting if you are a single member LLC; it still gets reported on your 1040, schedule E. However, you now have good liability protection.

Land Trusts vs. LLC’s - Posted by Mark A. Nyman

Posted by Mark A. Nyman on January 26, 2000 at 21:57:39:

I am getting different advice on how to purchase property and whether to use a land trust or LLC per property or one LLC for a bunch of property.

I have always bought property in my name. I am unclear on which entity makes the most sense for my situation. The accountant that I have always used favors one LLC and then transfer to other LLC"s as I get more properties. The lawyer says one LLC per property with separate checking account per property.

I would like feedback on what to do in this situation.

I was also told by a banker that if I put the property in a trust that I wouldn’t be able to borrow against that particular property.

I have two properties that will close in February and I want to set these up in the proper entities. I am also forming an LLC for buying and selling properties. The paperwork is in process. I am considering that rather than buy and sell and incur the tax consequences that I would refinance and pull the money out and keep a property which has a positive cash flow. If the cash flow is not positive then I would sell.