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Video instructions and help with filling out and completing Who Form 2220 Entities

Instructions and Help about Who Form 2220 Entities

What is the best legal entity for buying rental real estate? Today's video will discuss this topic. - Hi there, I'm Clayton Morris, founder of Morris Invest and a long-time real estate investor. - One aspect of real estate investment that we don't often talk about is how to structure your business in order to protect yourself legally. - For example, if a tenant were to have an accident on one of your rental properties and your property is in your own name, you could be held personally liable for any damages. - It is crucial to have a legal entity in place to protect your personal assets from being vulnerable in such situations. - So, is there a better legal entity for owning real estate? The answer varies and it's best to consult with a lawyer and an accounting team. - Regardless of the legal structure, having liability insurance for your rental properties is always necessary. - There are different types of legal entities for owning real estate, such as limited liability corporations (LLC), sole proprietorships, C-corps, and S-corps. - Personally, we use an LLC for our rental properties as it limits our overall liability. - High-level accountants and lawyers often recommend owning rental properties within an LLC. - Their advice is to consider setting up multiple LLCs if the value of the properties exceeds a certain threshold. For example, if the total value of three rental properties is $150,000, it is advisable to set up another LLC. - We usually name our LLC after the purpose, such as "Camera Happy LLC," and set up separate LLCs for properties in different states. - Canadian investors buying property in the US may find that an LLC does not offer them the same level of protection as a C-corp would, so they set up a C-corp instead. - It is important to discuss your...