LLC Income Clarification

[floweng]

I asked these questions as a response to another post, but it must be buried because there has been no response.  

The questions:

1) How-to articles and reading suggests that an LLC is a good vehicle, but isn't the income to an LLC subject to self-employment tax (FICA)? If not, how do you avoid paying the tax?

2) Where do you obtain an assignment form to transfer title? Can you transfer title after closing with the same form?

Thank you.

[tedjr]

I believe your question about transfer was how to transfer an earnest money contract and not actually the title. I have been transfered several EM contracts by just typing up a one paragraph contract that says I hereby agree to assune the contract and perform and argee to pay so n so x amount upon the closing of the purchase.

After the closing you must sign some type of deed transfering the property to the new buyer as the deed is already in your name. If you do a double closing you can transfer the deed directly from the original owner to the new buyer. The title company usually handles this but I have done the paper work myself on many occasions.

Hope I answered question # 2 for you.

About SE tax. I believe you are right but i do not know for sure. With real estate you get to use depreciation to offset you income as i am sure you are aware. I have always had losses on rental income property so I did not worry about SE tax. There are limits on the SE tax of $84,900 in income. I wish I could pay on that much income.

Hope I helped a bit

Thank you,

Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas  78737

512-301-9171 home
512-587-6177 mobile