LLCs (Limited Liability Company)

An LLC is yet another form of holding real estate. It has the advantage of providing asset protection for the owners from the inherent risk of liability of owning property. For example, if an LLC is forced into bankruptcy, the members will not be required to make up the difference with their own money. If the assets of the LLC are not enough to cover the debts and liabilities, the creditors cannot look to the members, managers or officers for recovery.

Another advantage on an LLC is the ability to be taxed as a "pass-through" entity. That means that the owners of the LLC are not subject to double taxation. This is different from a regular corporation, which pays a corporate tax on its net income (the first tax). Then, when the corporation distributes profits, the stockholders pay income tax on dividends (the second tax). With an LLC, the profits "pass through" to the owners who pay taxes at their individual tax rates.

LLCs also offer estate planning benefits. For the Real Estate issued in the name of an LLC, instead of having to file for a new deed upon the death of the investor, members can transfer ownership of the property to their heirs by simply issuing them a membership interest in the LLC.

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Property photos shown here are being provided for educational purposes only, to illustrate the different property types available in the real estate market. These photos are not intended to represent any particular type of TIC offering nor are they intended to represent any current or future TIC offerings.