Passive Real Estate Investing Asset Protection for Real Estate Investors | PREI 010
Aug 7, 2015
Clint Coons, a successful real estate investor and manager at Anderson Business Advisors, shares his wealth of knowledge on asset protection strategies for real estate investors. He discusses the critical need for integrating legal and tax strategies, emphasizing personalized business structures over generic ones. Clint debunks myths about simple solutions, highlighting the complexity of setting up LLCs for risk management. He also dives into the vital roles of insurance and land trusts in maintaining anonymity and safeguarding investments.
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IRS Audit
- Two Illinois investors using an LLC were audited by the IRS.
- Their gains were reclassified as active income, resulting in back taxes and financial hardship.
Structuring Entities
- Establish LLCs in the states where your properties are located, potentially with a land trust.
- Use a holding LLC in Nevada or Wyoming to consolidate your business interests and simplify taxes.
C-Corps for Flipping
- Use a C-corp for flipping properties and pay yourself a salary for better loan applications.
- This structure also provides income-shifting opportunities and pension plan contributions.
