LifeGen Law Group helps people manage their present and invest in their future with strategic, forward-looking estate and tax planning. One of the ways we do this is by helping owners rethink their ownership of important assets and their business interests. With the right ownership structure, you can protect these assets and minimize your tax exposure. In turn, you build a more stable foundation for your later years and ensure that your family will be cared for.
Real Estate Ownership
One of the best ways to protect your assets and reduce your taxable income is to invest in real estate. While real estate can lose value, it’s unlikely that it will ever be worthless. Furthermore, you could rent the property or convert it to other income-generating uses if ever you wish to sell but the market is unfavorable. Real estate can also be used to enhance your wealth in the following ways:
- By writing off real estate taxes, mortgage interest, and property insurance
- By writing off depreciation
- By creating an LLC or other pass-through entities to own your real estate
- By taking advantage of capital gains
- By taking advantage of 1031 exchanges or similar incentive programs
- By using rental properties to avoid FICA taxes
If you decide to create a real estate business to manage your real estate holdings, you can then use your business expenses as a tax deduction in addition to the deductions mentioned above.
LifeGen Law Group works with people who are considering investing in real estate as well as realtors and other established real estate professionals. We can review your situation, identify potential tax-saving opportunities, and create an ownership strategy designed to maximize your tax and estate planning benefits.
Business Formation and Structuring
Whether you are an established business owner or just beginning a new venture, how you structure the ownership of your business can have a profound impact on your financial standing. Our Springfield business formation attorneys can offer the guidance and planning you need during this step. For example:
- The ownership structure of your business can expose you to or insulate you from personal liability for claims against and obligations of the business.
- The ownership structure of your business can reduce your tax liability.
Choosing the right structure for your business is a critical step in your success, as it will also impact your control over the business, how you make decisions, and how you raise money. There is no one structure that is best for all businesses. Instead, you need professional guidance to help you decide which structure would best suit your needs. Our Springfield business formation attorneys offer that professional guidance.
Real estate investors and other real estate professionals should give careful consideration to the ownership structure of their businesses. For example, if you own rental properties, the ownership structure of your rental business could protect you from personal liability for injuries and other harms that occur on your properties.
Of course, there are also times when you may want to restructure an existing business. This could involve changing from a sole proprietorship or partnership to a corporate structure such as an LLC or S-Corp. In other cases, you may want to create additional corporate entities to further insulate yourself and your businesses.
Holding Companies and Subsidiary Companies
One way to create additional protection is to create a holding company that serves as a parent company to a subsidiary company. This structure is particularly common in real estate investment and development.
For example, you may create an LLC for the sole purpose of developing a specific parcel of land. The assets of the development LLC may be limited to only the parcel of land itself. A holding company is then created that controls the subsidiary development LLC but with separate assets. In the event that the development LLC goes bankrupt, creditors will have a very difficult if not impossible time pursuing the assets of the holding company.
If, on the other hand, the development LLC is successful and is able to make a significant profit, the income of the LLC will be taxed more favorably than it would be if you developed the property through a sole proprietorship or partnership.
Rethink Ownership – Contact LifeGen Law Group Today
Are you paying more in taxes than you should? Is your future at stake if something goes wrong? Could you be leveraging your assets more effectively in order to make the most of your opportunities? If you own a business or have significant assets, careful ownership structuring can save you money and protect your family. Contact our Springfield business formation attorneys today to schedule a free consultation to discuss how ownership structuring could help you and your family. LifeGen Law Group works with individuals, families, and businesses in Springfield, Branson, and throughout Missouri.