I'm wanting to establish a Nevada LLC (because Nevada has favorable corporate law and no capital gains tax). But before I do, I'm trying to gain some clarity on distributions.
I have a new real estate company and part of our capital holdings will be in investment real estate within this LLC. We have no operations per se, with our only source of "income" the money to be distributed from capital gains on the appreciated assets at sale. For example, the LLC buys a $100,000 property and sells it for $120,000, with a capital gain of $20,000.
My question is, is this $20,000 gain taxed at the capital gains rate and then distributed to the LLC owners with no other tax obligation or are these gains in some form taxed again when the owners file their taxes?
I'm also curious about what it takes to allow an LLC to be taxed separately from the owners. As I understand it, a single-owner LLC is taxed as a sole proprietorship meaning I'd have to lump in the capital gain into my other ordinary income.
I have a new real estate company and part of our capital holdings will be in investment real estate within this LLC. We have no operations per se, with our only source of "income" the money to be distributed from capital gains on the appreciated assets at sale. For example, the LLC buys a $100,000 property and sells it for $120,000, with a capital gain of $20,000.
My question is, is this $20,000 gain taxed at the capital gains rate and then distributed to the LLC owners with no other tax obligation or are these gains in some form taxed again when the owners file their taxes?
I'm also curious about what it takes to allow an LLC to be taxed separately from the owners. As I understand it, a single-owner LLC is taxed as a sole proprietorship meaning I'd have to lump in the capital gain into my other ordinary income.