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I plan to form a LLC to manage (holding company) individual LLC's (real estate purchases). Should I form initial LLC in Nevada?

Scottsdale, AZ |

I am an indiviual with no other partners. Are there more benefits (tax) to forming the managing LLC in Nevada than in my home state of Arizona. I plan to purchase the properties in different states.

Attorney Answers 3

  1. Best answer

    While Nevada may be a better place to form the LLC by the other posting attorneys' opinions, do miss that the IRS considers a single member LLC to be a disregarded entity for tax purposes. If you do all the planning and work in Nevada for tax benefits, but do not have an additional member for your LLC, then you may well have made your efforts for nothing. You should discuss with a business attorney licensed in Nevada (if that is what you wish to pursue) about how you can be sure to structure your LLC so that it is not considered a disregarded entity for tax purposes as that is a federal tax issue and not a state of creation issue.

    Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. I am licensed in Arizona and can only provide general comments on matters outside of Arizona law. Actual legal advice can only be provided after a direct consultation in which all of the relevant facts are considered before providing a response.

  2. I would likely say so, yes.

    This is AVVO, a place for users to obtain general legal information to general legal questions. I am glad to help you in any way I can, within those limits. I wish to make clear I am only communicating with you for the sole purpose of exchanging such general information, and nothing more. It is not legal advice, which I can not provide because among other reasons I know few of the necessary details of your situation. I do not purport to represent you in any way, shape or form. Of course, if you would like to seek out my services, and if you are a NY resident, I will probably not put up very much resistance but representation would still necessitate a signed retainer agreement between yourself and I. Thank you.

  3. Nevada law offers several advantages. (1) It was the first in the nation to offer the 'Series LLC' (2) It was the first in the nation to apply the 'Sole Remedy Law' to LLCs in order to limit the remedies available to predatory adversaries (3) The privacy of owners is well-protected and (4) the asset protection laws of Nevada are second-to-none.

    While you certainly have no legal barriers to having the other LLCs 'managed' by a single Nevada LLC - you may want to consider having the other LLCs owned by a Limited Liability Limited Partnership or consider having the LLCs managed by a Nevada Privacy Management Trust. If you'd like help looking at Nevada options, let's arrange a phone consultation.

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