Question
When buying properties from an foreclosure auction, is it better (tax advantage and safer) to form an LLC?
I want to pickup some auction properties for flipping them over, however i want to know if forming an LLC or not would be the best way to go about this.. in terms of tax advantage and liability (if there even would be a concern since im not renting it out)
1 month ago - 3 answers
Best Answer
Chosen by Asker
It is probably a waste of $1,000 for you to form an LLC. Just own the house and sell it when you are ready to flip. You have to pay capital gains tax to the IRS. There is not much else to worry about. Protect yourself by selling the house "as is" as long as you understand that "as is" does not protect you from charges of fraud. Don't promise that the AC will last for 10 years unless you personally installed it.
by Ed Atun
1 month ago
Asker's Rating: 
Other Answers
do not flip. buy and keep and put into an REIT that you form. after you get 5 props, put them into the LLC and it into a REIT
by kemperk- 1 month ago
If there was ever a judgment on you, the LLC would protect you under such entity or partnership. That's about its only advantage, but it is substantial. It could also go the other way, if someone was ever to be hurt on your property, you wouldn't be personally responsible and it would be the LLC that would be in trouble. See the book below for more information.
by JP- 1 month ago