Thanks Doc. Just wondering. I am still learning the ways of the world.
What you did is the most correct way, in my humble opinion. But for the sake of discussion for others following in our footsteps, allow me to go here.
In law there is no true right or wrong way. There is just the best way we choose for our particular purpose and needs.
Now let me go deep here.
By training I am a CPA, Masters in Computer Science with a heavy Paralegal degree (professional night student 15 years).
My experience is in financial management of businesses. I dropped out 20 years ago around the age of 50; everything was paid for and I wanted to do something different with my life.
After dropping out we picked up 24 rental properties.
Know this: You can only be sued under two conditions being met:
* First you have a deep pocket so the lawyerman will come after you;
*and you do something that pisses off someone.
We put all the properties in a "C" corp and leased the property to an "S" corp.
First this allowed us to take the tax advantages of both, which are different advantages.
But mainly this was done to prevent lawsuits.
In order to get sued, you must appear to be wealthy and do something.
Lease contracts with tenants were under the S corp, which was doing all the "Do Somethings".
But the wealth was in the C corp, which never did anything.
Therefore our business combination was somewhat exempt from worries of suits.
If we were notified of a suite, such as for being the offspring of an evil doer,
we could calmly (& legally) sign over the stock of the C corp to someone else.
A LLC is for when you are doing something really dangerous, way out on thin ice,
for instance, experimenting on cataract surgery with a pen knife. Now that's begging for a suit.
The advantage of a LLC is it takes a long time to find the deep pockets, decision makers etc., so it's costly to sue an LLC.
The disadvantage of the LLC is it's expensive to maintain, and if you don't maintain it, it becomes a regular corp.
The expense is you have to pay the lawyerman and a cpa to over-bill you every year to say they don't know you.
For a poor person building a homestead I would suggest leaving off the LLC, as a homestead will seldom do anything in dealing with the world to piss someone off (as apposed to a business). In fact leave off the corp altogether.
P.S. Doc: Take note that each of your businesses can take an expense for Continuety of Business. That amount is what you say it is and cannot be disputed much by IRS. You will have to hand that number to your accountant as he is not prepared to do it for you.
The number is the cost to protect you and your spouse and the businesses survival during potential chaos.
The cost can be as little as a spare office phone system to as much as a bug out location stocked with 5 years of food (and of course, lots of fine wine).
The plan can also be to survive two years while the hospital system collapses and then comes back up. So sharpen that pencil.
If necessary file an amended return for prior years to get your refund or just lump it all in this year.
But keep a bottle of wine handy as I feel the IRS will very soon disappear.
If needed, private email me and I will give more info. Happy hunting doc.
