Top 3 Reasons Why Every Real Estate Agent Should Have an LLC

We often get asked by real estate agents if forming an LLC is right for them or is it just a waste of time and money. It is neither! In fact, forming an LLC as a real estate agent might be the best decision you could make for your business. Here's why: 

1. Did you know that as an I-9 employee working under your broker that you are actually an independent contractor? Did you also know that as an independent contractor you are the sole owner of your personal real estate business? 

If you are not incorporated as an LLC with the IRS, you could be personally liable for problems that arise in your business. This means that if a buyer contends that you personally misrepresented a structural issue with the property, or if the seller says your advertising was misleading or you offered legal advice about the sale that was deemed to be unauthorized practice of law, your personal assets, bank accounts and maybe even your own home could potentially be used to help pay off damages in a lawsuit! 

Forming an LLC is starting to sound more enticing now isn’t it? Now, consider this... 

2. Did you know that there are tax advantages for being incorporated as opposed to simply being a sole proprietor? 

Incorporating with an LLC will give you important exemptions in self-employment tax that are not available to sole proprietorships. This is in addition to the numerous (and extremely beneficial) tax write offs that could offset your potential tax liability that you owe to the government every year. What’s even better is that if you’re itemizing your deductions, even the attorneys fees that you pay to set up your LLC and the cost of incorporating are DEDUCTIBLE! 

3. Did you know that the majority of audits conducted by the IRS are done on sole proprietors who take too many deductions or their deductions don’t match the scrutiny of the various tax code standards? Fact of the matter is, LLCs are over 10-times less likely to be audited by the IRS than sole proprietorships! 

What does all this mean? This information has both gotten me excited and scared all at the same time!

If you’ve read this far and have gotten to the point where setting up an LLC for yourself is something that you’re interested in, contact us today!. We’re licensed attorneys, focusing on Tax, Estate Planning, Bankruptcy and Small Businesses (like yours). We know the ins and outs of the Internal Revenue Code and have specialized degrees in Tax and Business Administration to help you and your small business succeed. We offer competitive rates and various payment options designed to fit your budget. Additionally, when you set up an LLC through our firm, the attorneys fees and Secretary of State filing costs are ALL DEDUCTIBLE! 

Why a discount Will form from Legal Zoom or another Internet “do-it-yourself” website will end up costing your family MORE when you die

We’ve all seen them, “$99 to draft your will” or “$199 do-it-yourself guide to estate planning.  Heck! We may or may not have purchased one for ourselves years ago. While the discount e-forms from these online libraries have a place (most likely the garbage can) they often times end up costing your family thousands of dollars more in the long run than they initially appear. The problem is not with the websites themselves, but rather with the system as a whole. 

When you purchase one of these $99 will forms online and enter your information you have created a virtual “holographic” will. In Nevada all else that needs to be done is to sign and date in your own name and voila! You have created your last will and testament. However, a will, by itself, does not avoid the costly court procedure (probate) when you ultimately pass away. Once you die your family has 30 days in which to submit your will to the probate court. The decision will then be up to the probate court judge to decide where your assets go and who is deserving of your estate.

The problem now is two-fold: (1) Probate is expensive and attorneys have the option of billing your family at their hourly rate or taking a percentage of the estate. This often times can result in thousands upon thousands of dollars being paid to the attorney, simply for putting your $99 will through the probate system. So, despite the fact that you drafted your own will and saved some money up front, your family is now stuck with a bill that is often 5-10 times what you would have spent had you hired an attorney to draft the proper estate planning documents instead of the $99 will form; and (2) All the things you thought you were leaving to people in your $99 will, may or may not ultimately go to those people. As mentioned above, the probate court judge is the final guardian of where your assets go when you submit a will through probate. If you submit one of the $99 will forms, you likely have missed a lot of potential property in your estate, some estate and death tax considerations and ultimately you have given the judge the final say as to where your things are going and to whom. In essence, you may have inadvertently cost your family the peace of mind you sought to create by drafting a will in the first place. 

If you would like to create a proper estate plan and avoid the costly probate procedure our attorneys are trained in the various nuances of estate planning and the intricate inner-workings of the U.S. Tax Code. Contact Us today for your free initial consultation and let us help you properly plan for your family’s future.