ILLMAS Posted March 17, 2014 Report Share Posted March 17, 2014 TP brought in a stack of papers and told me he created a living trust and transferred the deeds of his properties to an LLC, but from all the documents I cannot tell how to treat it for tax purposes? Continue reporting on Sch E or create a partnership return? Thanks MAS Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted March 17, 2014 Report Share Posted March 17, 2014 Is he a partner with someone or is this a smllc? Were these rental properties? What is the relationship between the living trust and the llc? Any besides his involvement in both? Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 17, 2014 Author Report Share Posted March 17, 2014 Is he a partner with someone or is this a smllc? His wife, however his kids will be the beneficiary. Were these rental properties? 3 properties are rental and 1 is a personal residence. What is the relationship between the living trust and the llc? Honestly, I can't tell, the Revocable Trust Agreement makes no mention of the LLC. Any besides his involvement in both? His wife, the kids will get equal share once both parents die. Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted March 17, 2014 Report Share Posted March 17, 2014 Revocable trust = nothing changes until something happens, such as death. Read the trust document. Quote Link to comment Share on other sites More sharing options...
Max W Posted March 17, 2014 Report Share Posted March 17, 2014 "His wife, the kids will get equal share once both parents die." .....after the estate goes thru probate, sometimes a very lengthy and expensive process. The main purpose of a intra vivos ( living) trust is to Avoid probate. In order to do this, most of the assets have to be titled within the trust. Avoiding probate also makes it more difficult for someone to challenge it, whereas a will or an intestate situation can be challenged by Anyone in probate - like cousin Charlie whom he promised his $100,000 Ferrari to when he dies. Since the main purpose of the LLC is to protect from liability beyond the value of the LLC property so that the personal residence can not be touched, I would wonder if the trade offs and balances have been weighed. Although LLC requirements vary by state, it would seem prudent to have each rental property with its own LLC. If they are all in one LLC, then a claim against one property would be a claim against all (except that in the trust). 1065, yes. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.