Posted by Justin Gross on May 22, 2005 at 22:40:07:
Thank you, Steve. I appreciate your response.
Now, you say ‘small’ amount of cash flow should have a LLC.
Is there an amount that’s considered significant cash flow for doing a Limited Partnership?
Is the franchise tax a flat or graduated amount or is it a percentage of gross or net profits?
Thank you for your help.
Corporate entity? Is it a good idea? - Posted by JustinGross
Posted by JustinGross on May 20, 2005 at 18:37:33:
My brother and I just purchased a piece of land in Texas. We live in California. We are going to develop the land into a small mobile home park. We will rent the lot spaces and the house and commercial building that are on the property. How should this be held? As an S-Corp? It will generate income that at least one of us will use as a primary income. We also want to keep doing projects like this so income will grow. Any insight would be appreciated. I love this site and forum, by the way. You’re amazing.
Re: Corporate entity? Is it a good idea? - Posted by Steve Tiemann
Posted by Steve Tiemann on May 22, 2005 at 20:49:23:
In Texas, small real estate investments / projects generating a small amount of cash flow can be structured with a LLC.
Larger real estate investments / projects generating a significant amount of cash flow should be structured with a Limited Partnership, with a LLC as general partner of the Limited Partnership.
This is very important in Texas because we have a state franchise tax. Corporations and LLCs are subject to franchise tax, Limited Partnerships are not.
On larger real estate projects, the franchise tax can be very expensive if you don’t structure the project properly.