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Case StudyUsing LLCs withRental Property
by Dyches Boddifordwww.Assets101.com 
Copyright © 2009 Dyches Boddiford
•
Assets101.com
THIS INFORMATION IS DESIGNED TO PROVIDE ACCURATE AND AUTHORITATIVE INFORMATION INREGARD TO THE SUBJECT MATTER COVERED. IT IS OFFERED WITH THE UNDERSTANDING THAT THEPRESENTERS ARE NOT ENGAGED IN REDNDERING LEGAL, ACCOUNTING OR OTHER PROFESSIONALSERVICE. IF LEGAL ADVICE OR OTHER EXPERT ADVICE IS REQUIRED, THE SERVICE OF A COMPETENTPROFESSIONAL SHOULD BE SOUGHT.
 
 
 Case Studies
© Dyches Boddiford
 
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1 -
 www.Assets101.com 
Case Study #2
(real life):John and Sarah are husband and wife. Based on an accountant’scounsel, they own four LLCs where they are each members, makingthem multi-member LLCs. Each of these LLCs owns a single rentalproperty. They also own one rental property in their own names as jointtenants. All properties are or are almost paid off (large equities). Hereis their structure.This structure provided the asset protection for John and Sarah andsegregated liabilities between the properties. However, it created a needfor four additional bank accounts, EIN numbers and partnership taxreturns. In studying
The Grand Plan
and
The Limited Liability & Partnership
courses, you know that it makes more sense to structure asbelow.
SarahJohn
LLCLLCLLCLLC
 
 Case Studies
© Dyches Boddiford
 
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2 -
 www.Assets101.com 
This would segregate the liabilities for each property from otherproperties. And, since the single member LLCs are disregarded for taxpurposes, only a consolidated partnership return for the multi-memberLLC is required. It would also provide charging order protection shouldJohn or Sarah get a judgment against themselves personally. But Johnwas tired of the extra tax returns and wanted to simplify even more. Heproposed the structure below.He proposed to set up five single-member LLCs, one to hold eachproperty. He would own two of the single-member LLCs and Sarahwould own three. In this structure, John certainly simplified the
SarahJohn
LLC LLCLLCLLC
Multi-Member LLC
LLC
SingleMemberLLCs
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