This thread IS about my original grievance — Sec. 1706 of the Tax Code It says so right there in the Subject line.
You’re a real estate professional lecturing computer consultants on stuff that works nicely in the real estate profession. It can be harmful in THIS profession. Because of 1706. Which has nothing to do with either LLCs or Real Estate. But there ARE companies who WILL NOT HIRE SINGLE-MEMBER LLC’S AS CONTRACTORS for gigs in computer-related high-tech gigs. I’m not aware that situation exists in real estate. Are you? What advice do you have for those of us who have LLCs and someone will only hire us as contractors if we’re either a C or S Corp? THAT is the topic at hand. It’s irrelevant how simple it is to set up LLCs if people won’t hire your LLC. If that was the case in real estate, you probably wouldn’t be using them, right? -David "The Tool Wiz" Schwartz > On Dec 8, 2016, at 6:48 PM, Vara La Fey <[email protected]> wrote: > > I was clarifying generalized things for the poster who mentioned LLC as a > suggestion from his accountant. > > Was that poster you?? Then you're welcome. Was it someone else?? Then correct > my errors or kindly stick to your original grievance. > > - Vara > - www.facebook.com/vara.lafey > <https://u2206659.ct.sendgrid.net/wf/click?upn=tzJbcg2o-2FNh3kfIF32sRUUEfAUrPlRdODloCrKUTDLEe1Xr5sB7TGzxKSs-2BD8fg9_6lpMB7VLnN-2Fj9-2FEErg8-2F-2BMBpb5QxlByTgv2M3fbWD9ebvC-2BWrN3h7jImK8EVWYBeKRW4yrs59mwQltWw1TlFtPTiyj95V7vNocmAzrMpKqkpVE-2Br2-2Bf1vOGz5sufnCI-2F6Ya2PrmBSfgY4RFONLujgsq4S7nxKaQJ96aQnbf-2BRpaebMnj7MgT5qpsu3fzNqbEgvXAZZSJxr89zZTHaURhNns0zCAowAtInVeeTDG4Psc-3D> > On Dec 8, 2016 4:39 PM, "David Schwartz" <[email protected] > <mailto:[email protected]>> wrote: > I’m not sure what the point of these “Rah Rah for LLC!” posts is all about. > Nobody has said anything to the contrary. > > This list is primarily for people who work in the "high tech" (i.e., > computing) industry, which is SPECIFICALLY what Sec. 1706 of the Tax Code > deals with. > > If you’re in Real Estate, Accounting, Architecture, or whatever, 1706 does > not apply to you. It’s very, VERY NARROW in its applicability — BY DESIGN. > > Sec. 1706 eliminates the “safe harbor” provisions for people who work as > contractors, eliminating any “benefit of the doubt” that is historically > given in most other professions, and instead subjects workers and the > companies that employ them to a vague 22-point (IIRC) series of questions > that an IRS Auditor can use to establish whether someone should be (or should > have been) regarded as a “contractor” or “employee” for tax purposes. > > The problem is, this is not something that is adjudicated when you hire on, > and it does not matter how many reams of paperwork you sign that says it’s > one thing or the other. > > It’s a ticking time-bomb that applies in the vast majority of cases 3-5 years > AFTER THE FACT when the person — usually hired as a contract worker at the > time — is audited by the IRS for whatever reason, and the auditor reviews one > of his employment situations and subjects it to the 22-point “test”. If he > rules the person was acting as a “contractor”, all is fine. > > But if he rules the person should have been treated as an “employee”, both > the person and the erstwhile “employer” just got nuked. > > The back-due taxes assessed to the “employer", plus accrued penalties and > interest, typically amount to far more than whatever the person was paid. The > company has no knowledge anything went awry until they suddenly get a bill > from the IRS. > > Meanwhile, the person in question now has to “unwind” any business expenses > and deductions, as well as anything that depended on them such as retirement > contributions, FICA/FUTA/UI set-asides, etc. Everything is up-ended and needs > to be re-filed. > > And to add insult to injury, the same auditor is likely to flag previous and > subsequent years for auditing as well, and what do you think he’s going to > rule on other contract gigs that were fundamentally the same situations as > the first one he nuked? > > Again, if you’re not in the high-tech industry, this does not apply to you. > > Having a single-member LLC stand-in to protect you against such situations > can be helpful, IF the company you want to work with is willing to hire you. > Many are not because of problems discussed in other threads. > > -David "The Tool Wiz" Schwartz > > > >> On Dec 8, 2016, at 4:53 PM, Vara La Fey <[email protected] >> <mailto:[email protected]>> wrote: >> >> Yes, you can be the only user ("Manager" and "Member") of an LLC. I did it >> for years in real estate, and still have my LLC. >> >> IIRC the form takes more like 5 min. You publish your intended LLC in the >> Record Reporter for 6 weeks. I forget the cost, but it's fairly cheap and >> easy. And IIRC, the Sec of State office (or wherever I went) has a form for >> that too. >> >> LLCs are almost zero maintenance and are not sublect to hostile takeover. >> And so easy that some real estate investors create one for each property, >> just to keep properties legally isolated from each other for basic liability >> reasons. An LLC name like "<street address>, LLC" is one of those. (So named >> cause the investor realized that pretty names would be silly and confusing.) >> >> Good luck!! :-) >> >> - Vara >> - www.facebook.com/vara.lafey >> <https://u2206659.ct.sendgrid.net/wf/click?upn=3cK2FVJjyu2N-2Bxco034fZnnbK2LIZIfnojzH-2BPzZg719bV7hL2TJnC2UduzrwTqYFT6KRTGnVKmzvcAKMPt79XrrgQnt-2BSNUlminq-2F76bJx9ZjtqcTQrqktkVt4owoc319cITVAwLk-2BOQMb9wm1aTEIeL5bE5CnOiigdLaja-2FV7Nhw7GT4DrHEkMbdEKMmavkjE7veYmbT4e6KFkih-2FOxCTHdQNYHVIEz-2B4ypziKQc5XHN4kB1j-2FuhIDb2ikWU6RqN2N9p1qXuvZXynCL54yGwQvOjgNy0XcR3VhYdauJ-2FQNDIqPlox23BTST1xXhVNe4uNxMdKKQ8OhwWoSEfRY4Pye7JrdEYC64eX4TPd-2FykuUI9gWuluO7q8z-2BoeZI6oQG7v-2FFWz1E-2Feua1JgTZg87TAeBjCONsmnCgke31l0jifmIC-2Fx407Vq64ZCPjWwvQFos-2BRVvdfSvT8ttejqNvbDC07xaHE9-2BnB1e17N6sF8aMKmoNsRtw4jr1BVKxR1HbRT28CKz-2FQL9-2BSS4yOGPjOSQ-3D-3D_6lpMB7VLnN-2Fj9-2FEErg8-2F-2BMBpb5QxlByTgv2M3fbWD9ebvC-2BWrN3h7jImK8EVWYBeKRW4yrs59mwQltWw1TlFtGfHaF5izbJHrLaaV9vp8ijsZ8yPg3az7hybsbrVg-2BHLTdRKF477tHX-2B3L-2FJ6HGAT0QLfzD6M53dB96-2Bd5SccoiJ5KtI-2FnS3rP9XCB1n15qkaPqZ5FLQf9MDNoty32e2-2FTbd-2BbWI0-2B44er45nXiiXh0-3D> >> > > > > --------------------------------------------------- > PLUG-discuss mailing list - [email protected] > <mailto:[email protected]> > To subscribe, unsubscribe, or to change your mail settings: > https://u2206659.ct.sendgrid.net/wf/click?upn=5DvWGaZUY8Sh5aRLWfQTKYiRLVzunonVk948p8WIzMe-2FXlJ9Cta8w8U9xoku9LrUSHNMJbSd3ZEwH-2BqnW2UHlA-3D-3D_6lpMB7VLnN-2Fj9-2FEErg8-2F-2BMBpb5QxlByTgv2M3fbWD9ebvC-2BWrN3h7jImK8EVWYBeKRW4yrs59mwQltWw1TlFtKctIyo7pPSoUl-2BuNZWKt9JjMYlmrJ2ZTj0sPSvJJNaDGqnsL2btG0ZoywjMai6j3RxQ4ZRtGfbdnLr3zNzoAPVTqMYKl7UMAaJIvvwfH6eJIH0xyb8519YnqCawoY5dlapdHwbi8-2BRgPVSjyPX3-2FAg-3D > > <https://u2206659.ct.sendgrid.net/wf/click?upn=5DvWGaZUY8Sh5aRLWfQTKYiRLVzunonVk948p8WIzMe-2FXlJ9Cta8w8U9xoku9LrUSHNMJbSd3ZEwH-2BqnW2UHlA-3D-3D_6lpMB7VLnN-2Fj9-2FEErg8-2F-2BMBpb5QxlByTgv2M3fbWD9ebvC-2BWrN3h7jImK8EVWYBeKRW4yrs59mwQltWw1TlFtEQ8X4NxJLyXWQ-2F315rJNcrW1L9jt1zMrKwjXGo68gQ85K0ocovBt0v1D4oTehi01UhiCGvaKKvKmD6J9DYAtnjpQStiM9l7HtiotFnbCm5ZSgDg9Go2-2Fn4p0gqPHWGPcezEO81gxh-2B0H-2FwumlQKHLo-3D> > --------------------------------------------------- > PLUG-discuss mailing list - [email protected] > To subscribe, unsubscribe, or to change your mail settings: > https://u2206659.ct.sendgrid.net/wf/click?upn=5DvWGaZUY8Sh5aRLWfQTKYiRLVzunonVk948p8WIzMe-2FXlJ9Cta8w8U9xoku9LrUSHNMJbSd3ZEwH-2BqnW2UHlA-3D-3D_6lpMB7VLnN-2Fj9-2FEErg8-2F-2BMBpb5QxlByTgv2M3fbWD9ebvC-2BWrN3h7jImK8EVWYBeKRW4yrs59mwQltWw1TlFtK-2FG7bdfrswTyl0shxbFjx6XnP1bwL2-2Bdskzmk4XPkoR1QX6Mwt-2BDo5MtLJci6r1DwHL8xVw3-2BfsD-2FxGpiLhEBfoclFPyolrK68BrFsHSZVYkwbWjx4NAnwOCZiBQq-2F7U98kH5VbP-2FkWVQwDRw8mbdM-3D
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