nevada llc corporation



“Thank you Nevada123, for your commitment and your professionalism. You made my experience with your process a smooth one. Your consultants are knowledgeable and patient. They have helped me tremendously to understand and learn. Their advice was genuine and right on point. I intensely researched, looking into other companies and their websites. Your site was well put together and informative. It was all the small things that made my choice as easy as 123 in choosing you guys. Sincerely thank you again.
- Dan, New York

Search:   
Category jump:
Nevada Asset Protection  
Nevada Asset Protection Tutorial  
How can I protect my home?  

One of the major concerns people have is how to protect their home in the event of a lawsuit. Many times the fear of losing your home, is enough to force a legal settlement even if the lawsuit has no merit or is not even legitimate. Lawyers know this and many lawsuits are filled in this country just because the lawyers know that they can get a settlement. They know that the fear of losing one's home or other assets will bring the defendant to the settlement table.

Although the family home is a reasonably Safe Asset, with liability generally covered by insurance, because of tax issues it is extremely important how the family home is handled:

The first problem concerns the availability of the income tax deduction for home mortgage interest. Section 163 of the Internal Revenue Code permits a deduction for "qualified residence interest." A "qualified residence" is defined as the "principal residence" of the taxpayer. The only requirements appear to be that (1) the house is the principal residence of the taxpayer; (2) interest is paid by the taxpayer; and (3) the taxpayer has a beneficial interest in any entity that holds legal title to the property. Based upon the language of the statute, the deduction for mortgage interest would, therefore, not seem to be adversely affected by a transfer into a Corporation, or a Limited Partnership. However, until the law on this issue has been conclusively decided you should not risk the consequences of a disallowance of your mortgage interest deduction.

Secondly, under IRS Code Section 121, only an individual or a grantor trust would be entitled to qualify for an exemption of $250,000 ($500,000 if married) from the sale of a personal residence. If a personal residence is transferred to a Corporation or Limited Partnership or Family Limited Partnership then this Tax benefit will be lost, see below: The 5 Biggest mistakes made in Asset Protection.

However, if the Residence is transferred to a "Nevada  Asset Holding LLC" taxed as an LLC Disregarded Entity the Tax benefit is maintained. Under Treasury Reg. 301.7701-3 the default "tax status" of a single member LLC is: "Disregarded as an entity separate from its owner". This single member LLC would be completely disregarded for tax purposes and the individual member will be taxed as if he or she had never transferred the asset. A married couple also qualifies as a "single member" per IRS Rev. Proc. 2002-69, 2002-2 CB831 if 100% of the membership interests are owned by husband and wife as community property in a community property state.

This situation is ideal since it allows you to have the best of both worlds: You can deduct mortgage interest, qualify for the $250,000 exemption ($500,000 if married) and have charging order protection against creditor claims.

When it comes to your homeowners' insurance, you will be able to maintain your policy "as is" because you have an "insurable interest" as the member of the LLC. Ideally you would add the LLC as an "additional insured" on the policy.


Related items  

(Click image to view)
This website is owned and operated by eXodus Logics Pte. Ltd. ("The Company") incorporated in the Republic of Singapore pursuant to the Companies Act, Cap. 50.

This site and any information contained on this site were written to provide information regarding the subject matter. The entire content of this site is copyrighted and may not be reproduced without the express written consent of The Company, holder of the copyrights. ©2000-2016. Privacy & Legal

The information contained herein is believed to be accurate. It is provided with the understanding that the publisher,
The Company, is not engaged in rendering legal or accounting services. The Company is not affiliated with any Bank. The Company is not a law firm or Certified Public Accountancy or Chartered Accountancy firm. As always if you need legal advice consult with an attorney or a solicitor. If you need tax advice consult with a Certified Public Accountant, a Tax Attorney or a Chartered Accountant.

Business incorporating and ancillary services are provided by “Approved Service Providers” in various jurisdictions including Hong Kong, Republic of Panama, Belize,
St. Kitts & Nevis and Nevada U.S.A.

All prices are listed in United States Dollars (USD).