Single Owner and LLC .. worth it?

[denverpilot]

Not always. Depends, for example, on the type of claim being made.

Yeah. It's ... complex. But the original assertion was that they're expensive and/or difficult to set up. Which of course, isn't true. Especially here. Heh.

 

[weilke]

My only point is that in both cases, the entity is irrelevant to liability for our own careless or intentional acts.

...and there is more opportunity for intentional acts with a plane than a condo.

 

[EminiTrader]

Not expensive at all. Each LLC I do is 125 plus filing fees - then you have annual resident agent fees.. Structure is key. Knowledge is power. At least that's what they tell me.

 

[MIFlyer]

The LLC costs money to setup. And in some states there are annual fees to keep it going.

true, but in my state they're pretty minimal whereas sales tax is 10% and there are other considerations to the LLC (can get it's own checking account for expenses/etc)

 

[J4000]

Interesting thread that at least from my aircraft ownership perspective, mostly misses the big point (except MIFlyer above!). The reason I setup a Delaware S-Corp for owning my aircraft was simply to escape sales tax in my home state. This was about 20 years ago, and I sold the plane in 2000, but many more states are getting in on the "registration" mess of aircraft with the apparent sole purpose being to snag the sales tax on the deal....which at maybe 7%, can be a $5600 hit on an $80,000 aircraft. If you're domiciled in a state that's going to hit you for sales tax, you're being financially reckless to NOT setup a corporation in a tax-free state. At the time I did this, the registered agent fee was something like $60 per year, and included in that fee they would forward all "real" mail (AD notices, etc.) I think my whole cost per year in DE some 20 years ago was right around $100. Had I added a boat, second plane, condo, etc. none of those fixed costs would rise. If there's a liability shield that happens to fall out of a properly structured adventure, then all the better, but I never made that my primary concern.

 

[denverpilot]

The reason I setup a Delaware S-Corp for owning my aircraft was simply to escape sales tax in my home state.

Legally that doesn't work anymore and technically never did, but a lot of people got away with it. Case law is pretty set on it nowadays.

You're very unlikely to win that one now. Probably a few folks who still believe it works and just haven't been audited.

By 2000 when you sold they were already cracking down on it.

 

[EminiTrader]

Interesting thread that at least from my aircraft ownership perspective, mostly misses the big point (except MIFlyer above!). The reason I setup a Delaware S-Corp for owning my aircraft was simply to escape sales tax in my home state. This was about 20 years ago, and I sold the plane in 2000, but many more states are getting in on the "registration" mess of aircraft with the apparent sole purpose being to snag the sales tax on the deal....which at maybe 7%, can be a $5600 hit on an $80,000 aircraft. If you're domiciled in a state that's going to hit you for sales tax, you're being financially reckless to NOT setup a corporation in a tax-free state. At the time I did this, the registered agent fee was something like $60 per year, and included in that fee they would forward all "real" mail (AD notices, etc.) I think my whole cost per year in DE some 20 years ago was right around $100. Had I added a boat, second plane, condo, etc. none of those fixed costs would rise. If there's a liability shield that happens to fall out of a properly structured adventure, then all the better, but I never made that my primary concern.

Good luck with that one. You are knowingly trying to avoid paying tax. Some states that's a crime. May be all states, not sure. But it will not work nowadays.

 

[SCCutler]

Interesting thread that at least from my aircraft ownership perspective, mostly misses the big point (except MIFlyer above!). The reason I setup a Delaware S-Corp for owning my aircraft was simply to escape sales tax in my home state. This was about 20 years ago, and I sold the plane in 2000, but many more states are getting in on the "registration" mess of aircraft with the apparent sole purpose being to snag the sales tax on the deal....which at maybe 7%, can be a $5600 hit on an $80,000 aircraft. If you're domiciled in a state that's going to hit you for sales tax, you're being financially reckless to NOT setup a corporation in a tax-free state. At the time I did this, the registered agent fee was something like $60 per year, and included in that fee they would forward all "real" mail (AD notices, etc.) I think my whole cost per year in DE some 20 years ago was right around $100. Had I added a boat, second plane, condo, etc. none of those fixed costs would rise. If there's a liability shield that happens to fall out of a properly structured adventure, then all the better, but I never made that my primary concern.

First and foremost, the state in which the title resides will virtually never protect you from liability for the sales and/or use tax; it may mask it (for a while), but of course, when discovered, it will simply mean interest and penalties.

Worse, if you title your aircraft in a state with no logical relationship to the aircraft or its owner, solely for the purpose of evading tax, you could be prosecuted.

Where this myth of avoiding tax by titling the plane to another state's corporate entity (most often Delaware or Nevada) started, I don't know - probably with people who sell the service of creating Delaware or Nevada corporations - but if (and nowadays, more often, when) your home state gets around to you, you'll pay the tax. You'll pay the interest. You'll pay the late-file penalty (for both the sales tax and the foreign corporation registration that the guy back in Nevada or Delaware never bothered to mention).

Just pay the tax you owe.

 

[J4000]

And eat your broccoli!!!