• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

LLC or Sole Proprietor? Advantages?

Status
Not open for further replies.

VolcanoLvr

Thread Starter
Senior Member
Joined
Oct 30, 2003
Professional Status
Certified Residential Appraiser
State
Washington
What's the value of being a LLC, vs just a Sole Proprietor?

Tax consequences of both??

Add'l benefits as an LLC???
 

Kali the Boston Terrier

Senior Member
Joined
Jul 7, 2003
Professional Status
Certified General Appraiser
State
Michigan
What does your accountant say? Everyone has a different situation, depending on their income levels and exenses.

Most people will advocate at the very least having your business in a LLC or S-Corp for liability reasons. But very few entitites will protect your personal assets given appraisers are licensed as individuals and not companies (unlike brokers). So many people think incorporating will protect them when they get sued for an appraisal issue...sadly that's not the case. But run someone over while driving to an appointment or have an employee make a mistake, then the liability is there
 

NC Appraising

Senior Member
Joined
Apr 28, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
Dave,

I took a CE class last year for my general contractors license, and the teacher had a CPA come in to talk about this specific matter. During the break I told him that I was also an appraiser, and his advice was this: if I did not have any (depreciating properties) investment properties, or rental properties was to set up an S-corp.

This was his example that he used:

LLC or Sole Prop.
Revenues 100,000
S-corp 100,000
Bus. Expenses 40,000 S-corp 40,000
Salary -0- S-corp 30,000

Profit 60,000 S-corp 30,000

SE Taxes (15.3%) 9,000 S-copr -0-
Payroll Taxes -0- S-corp 4,500
Income Taxes 6,000 S-corp 6,000

You pay IRS 5,000 S-corp 4,500


You save $4,500 by being an S-Corp.

**In the class he said out of 50 people he always had three or four that adamantly disagrees with him, so get a second opinion. **
Here is his website, shoot him an email. www.CPAResults.net
 
Last edited:

Mike Plumlee

Junior Member
Joined
Feb 21, 2007
Professional Status
Certified Residential Appraiser
State
Texas
In our state, an LLC and a sole proprietor are treated the same tax-wise, state and federal. The state acknowledges that the LLC is strictly to provide a thin layer of protection akin to a corporation.

For the thin corporate veil, it is worth the time and expense to go LLC here.
 

NC Appraising

Senior Member
Joined
Apr 28, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
What protection are you preferring too?

Thats why your licensed; the LLC or corporation doesn't protect you. If you do something that your not supposed too, it's your butt that's in trouble.

LLCs offer some protection from liability for actions taken by your company or by other members of your company. It does not protect from liability for personal actions.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
In our state, an LLC and a sole proprietor are treated the same tax-wise, state and federal. The state acknowledges that the LLC is strictly to provide a thin layer of protection akin to a corporation.

For the thin corporate veil, it is worth the time and expense to go LLC here.


Here an LLC takes $50 and two weeks.
Done simple and over with.
 

Mike Plumlee

Junior Member
Joined
Feb 21, 2007
Professional Status
Certified Residential Appraiser
State
Texas
What protection are you preferring too?

Thats why your licensed; the LLC or corporation doesn't protect you. If you do something that your not supposed too, it's your butt that's in trouble.

LLCs offer some protection from liability for actions taken by your company or by other members of your company. It does not protect from liability for personal actions.

LLC owners are protected from personal liability for business debts and claims. A sole proprietorship offers no veil at all. The LLC at least protects an individual from business claims against personal property. At least it does here. There is no corporate structure that shields against negligence of action in our business ... and I wasn't intimating there was. But again, if I have choice between a sole proprietorship and an LLC as a business structure, it is a no-brainer.
 

NC Appraising

Senior Member
Joined
Apr 28, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
Mike,

I agree with you on either a sole proprietorship or an LLC. LLC hands down.

IMNSHO, the S-Corp is the way to go. I personally interviewed several attorneys, and CPA's and for my situation the best choice was to go S-Corp. (one man show) For me it was all about the numbers.
 
Last edited:

Doug in NC

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
From practical experience, I vouch for the S-corp. I started business as a sole proprietor and the IRS eats you alive in taxes. Although my accounting fees have gone up due to incorporation, tax $$$ saved has been very significant. I think the real challenge is finding a good accountant who actually advises you on how to save money. Mine just runs the numbers each year and it is up to me to try to find ways to minimize the tax burden.
 

Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
If you find a good one Doug, let me know. I'll do likewise for you.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks