LLC and 'other income'

[1stTimeCaller]

Let's say a guy make some money on 3-20-06. The check is made out to him. If the guy was to create an LLC on say 5-20-06 could he say that that income was for the LLC?

[jeremy885]

quit cheating on your taxes

:mad:

[JohnnyMack]

Post reported.

[yermom]

the answer is to take only cash ;)

[Hamhock]

Why would you want to do that? An LLC is a flow-through entity. Most income expense items retain their characteristic and are passed directly to the members. The main reason most people set up an LLC are for multiple owners and legal liability, not a tax shelter.

And probably not..

[1stTimeCaller]

quit cheating on your taxes

:mad:


I'm not cheating. I'm wanting to know if that is within the rules that the IRS has setup. If I can take advantage of their rules I'm going to.

[C&CDean]

I'm not cheating. I'm wanting to know if that is within the rules that the IRS has setup. If I can take advantage of their rules I'm going to.

If you claim more than $25 when you donate the polyester pimp couch to Goodwill, I will report you myself.

[JohnnyMack]

Yeah, about that couch.

We need to talk.

[1stTimeCaller]

Why would you want to do that? An LLC is a flow-through entity. Most income expense items retain their characteristic and are passed directly to the members. The main reason most people set up an LLC are for multiple owners and legal liability, not a tax shelter.

And probably not..

Here's the deal. I have some mineral rights. A company is offering me $150/ acre to lease them for three years. If they drill I get 3/16 of a dollar for every net dollar produced until the well dies.

If I get the LLC set up before I get the check, which should be in a few months because I'm gonna negotiate with them for more money per acre, should I be good? Or do I need to 'sell' the mineral rights to my LLC once I get it setup?

[jeremy885]

I thought you said that you and your brother were going to use it to write off your cell phones and other expenses against a small amount of side work income?

[1stTimeCaller]

I thought you said that you and your brother were going to use it to write off your cell phones and other expenses against a small amount of side work income?

yep. and that my friend is not cheating. That is playing by the rules that the IRS and Congress has made.

I think you are trying to say that the no huddle offense is cheating or the forward pass is cheating.

[JohnnyMack]

I thought you said that you and your brother were going to use it to write off your cell phones and other expenses against a small amount of side work income?

They're going to make the sequel to 'Prison Break' and call it 'Prison Bit*h'.

[Hamhock]

Here's the deal. I have some mineral rights. A company is offering me $150/ acre to lease them for three years. If they drill I get 3/16 of a dollar for every net dollar produced until the well dies.

If I get the LLC set up before I get the check, which should be in a few months because I'm gonna negotiate with them for more money per acre, should I be good? Or do I need to 'sell' the mineral rights to my LLC once I get it setup?


Are you in the earl binness? If not, I would seek some counsel. Lotsa people been scammed over this type of deal. I'm not saying this is a scam, just saying that if you aren't familiar with the industry, find someone who is.

A single member LLC is largely ignored for tax purposes (no tax return filed). You would probably want to transfer the rights to your LLC to enjoy the most liability protection. This however, is a legal question and I ain't no lawyer. Maybe one of the SO in-house counselors can speak up.

By the way, for the rest of you hillbillies, If you are going to establish a corporation, establish a corporation. If you just file for a name, but don't keep separate records, annual minutes, etc, you are wasting your time. The only reason to set up corp in this case is for legal protection. If you don't do it right, your assailants will just collapse the corp and successfully part you with your pink hat. I've seen it done many times.

[jeremy885]

yep. and that my friend is not cheating. That is playing by the rules that the IRS and Congress has made.

I think you are trying to say that the no huddle offense is cheating or the forward pass is cheating.

So your going to allocate what % of your expenses for your "business" and report only these as your business expenses?

If that's the case, I apologize but you made it sound like that you were deducting everything you could regardless of what it was for.

[mdklatt]

yep. and that my friend is not cheating. That is playing by the rules that the IRS and Congress has made.



Can't you only deduct the portion of the expense that is business-related? Surely you can't deduct your entire cell phone bill if most of the calls are to friends, Dalworth, etc.

[1stTimeCaller]

Well, I'm looking for a tax shelter not a liability shelter if that makes any sense.

We're not talking about very much money here but I'd like to keep every little bit that I can.

And hamhock, I've done this before and this is a standard mineral lease. I've seen folks try to set up an agreement to sell my minerals to look like a lease and some other crap but this offer is legit.

It's like owning an empty lot and somebody offering to give you a cut of the action for them spending a Saturday parking cars on your lot for OU football games. Although that is probably more profitable than what I'm involved in.

[colleyvillesooner]

heh

[Hamhock]

Well, I'm looking for a tax shelter not a liability shelter if that makes any sense.




Setting up an LLC for this purpose doesn't really make sense. You can run this as a sole proprietorship and deduct the same expenses on Schedule C and save the money of setting up a corp.