Extend lease or buy new building?

[sinclairgraphics1]

I've been leasing a shop space for my business for the past 11 1/2 years. The current space we've been in over 7 years and have around 5500 square feet. We are outgrowing it as far as the production space/offices and have been looking to buy for the last year or so. With our size requirements, 7000-10,000 square feet, typical purchase price starts at $1million and goes to $1.5million range in our area. Leasing the same size shop would be $8-$10k a month. Of course the loan interest rates right now are not great. My lease is up in June, I can stay there and do some more build out but I'll loose garage space in one bay if I do that. Or buy a building for said price and have everything I need. The space I did find is in a warehouse area, off the beaten path a bit which can be good to not have as many randoms walking in all the time. The questions no one knows, is this a good time to buy or wait and things go down? It seems nothing goes down anymore but possibly the loan rates might. Has anyone on here bought a warehouse recently? Better to lease or buy with this current market? Leasing is great with the flexibility but at the end of the day it's obviously not yours with everything you've done to it.

 

[Notarealsignguy]

I don't see interest rates going down anytime soon. Property, possibly? If the real estate market were to enter a major downturn, it will be very hard to get a loan on commercial property anyways. Most of the deals to be had during the last recession were cash only. A lease is nice because you can move about as you see fit and when you decide to retire, you don't have a property to unload. There is also a lot of maintenance on 10k sq ft and the insurance can be pretty expensive. Plus side is, it is yours and you never have to worry about the rent going up or the landlord not renewing your lease. The principal paid is not a write off like a lease so right there you'll be carrying another $100k in net income minus whatever your interest expense is. It's also an asset you accrue that the business pays for which can be a nice nest egg or a burden come retirement time depending on the market. Most commercial loans are short balloons so you will probably end up with a pretty substantial mortgage that basically gets pissed into the wind, you really need to pay it off as quick as you can. Anyhow, if you want to buy, I don't believe that waiting will be advantageous.

 

[richsweeney]

It is never too late to buy real estate. Make sure you always charge market rates and then some for rent. You will need a separate llc for the building. I bought our building in 2005. The morgage payments are about 20% of market rent rates today.
I let our cpa initailly treat the morgage as a longterm loan. For the last 2 years it is charged as rent, and my tax bill has been much lower.

 

[F1225hgB42w]

I've been leasing a shop space for my business for the past 11 1/2 years. The current space we've been in over 7 years and have around 5500 square feet. We are outgrowing it as far as the production space/offices and have been looking to buy for the last year or so. With our size requirements, 7000-10,000 square feet, typical purchase price starts at $1million and goes to $1.5million range in our area. Leasing the same size shop would be $8-$10k a month. Of course the loan interest rates right now are not great. My lease is up in June, I can stay there and do some more build out but I'll loose garage space in one bay if I do that. Or buy a building for said price and have everything I need. The space I did find is in a warehouse area, off the beaten path a bit which can be good to not have as many randoms walking in all the time. The questions no one knows, is this a good time to buy or wait and things go down? It seems nothing goes down anymore but possibly the loan rates might. Has anyone on here bought a warehouse recently? Better to lease or buy with this current market? Leasing is great with the flexibility but at the end of the day it's obviously not yours with everything you've done to it.

We purchased a building at the end of 2019 - we are in Seattle, WA (actually a suburb called Kent) and when we signed our lease in 2015 rent was .40 $/sq. ft. for warehouse and in 2019 it was going up to .77 $/sq. ft. so buying made more sense. We purchased a building via the SBA and locked in a super low rate in early 2020. In the three years we've owned the building we've be able to put away nearly half a million in principle payments. Also, the market in Seattle has stayed hot, while you never know what you would get for a building until you actually sell it, we expect we've appreciated by nearly 100% in the last three years, with a building that is nearly identical selling just a few months ago for over $7 million (we paid $3.85 for our building). Our building is also slightly larger, in a better location, and has higher ceiling with loading dock, so I could see ours going for over $7 as well, and if that is the case, after all our costs we would have made an additional $2 million in only three years (that is some serious cash to me).

Obviously the inflation in the last few years has actually driven values up in the Puget Sound area way more than normal, I would say a 4-5% annual appreciation is reasonable to expect (might be different in your area). We plan to hold the building for at least another 7 years (SBA has penalties if we sell earlier than 10 years), but going off that and using a 1.5 million estimate for your building, you will be appreciating 75,000.00 a year you won't get if you rent (the landlord will). Hold a building for 10 years and you are talking 750,000.00 on top of whatever you make running your business (and if you think if it as compounding it's actually around 944,000). Plus, the amount you pay down in principle each month comes back to you (again you don't get any of your rent back from your landlord later).

One piece of advice, if you buy a resale building (used) and plan to improve the building - double or triple whatever you "think" the construction costs will be, we found out the hard way, everything is way more expensive than you think!

Best of luck to you!

 

[netsol]

it is never too late to buy real estate, but, biden is working his magic, with skyrocketing interest rates.
"buy low, sell high" is still a viable concept.sadly, now is not the time

 

[garyroy]

Owning has some serious advantages for sure. 10,000 Sq ft is a pretty substantial building.
Be sure you get a very professional engineers report before closing on the loan. We own our location but roof repairs
over the years have added up $$$. The building is less than 25 years old.
New construction is going to run $125 Sq ft and up. Most commercial loans require 25% down, that's pretty hefty.
Most commercial loans adjust every 3 to 5 years. When rates were low we locked in a 10 year and paid it down fast.
Once your building is paid for, the rent then becomes passive income to you. That's not too bad.

Maybe get a building that has a space for a tenant. They can help you pay the monthly nut. When you get bigger you can take over their space.
Be sure you have enough parking for the future. Nobody ever complained about having too much parking.
A loading dock would also make your life easier. Beware of asbestos on used old industrial space.

We are in an industrial park. We don't have walk ins, we don't want walk ins. Time is the most precious commodity.
Enjoy your search!

 

[sinclairgraphics1]

Owning has some serious advantages for sure. 10,000 Sq ft is a pretty substantial building.
Be sure you get a very professional engineers report before closing on the loan. We own our location but roof repairs
over the years have added up $$$. The building is less than 25 years old.
New construction is going to run $125 Sq ft and up. Most commercial loans require 25% down, that's pretty hefty.
Most commercial loans adjust every 3 to 5 years. When rates were low we locked in a 10 year and paid it down fast.
Once your building is paid for, the rent then becomes passive income to you. That's not too bad.

Maybe get a building that has a space for a tenant. They can help you pay the monthly nut. When you get bigger you can take over their space.
Be sure you have enough parking for the future. Nobody ever complained about having too much parking.
A loading dock would also make your life easier. Beware of asbestos on used old industrial space.

We are in an industrial park. We don't have walk ins, we don't want walk ins. Time is the most precious commodity.
Enjoy your search!

Here are a couple photos of it. There are 5 total overhead doors 14' tall which is perfect for the trucks and buses we work on. There is also lots of parking lot and the rear of the building has about 1/2 acre of lot that's fenced in with barbed wire fence. Could have people store their trailers/rvs back there for some easy passive income as we won't need all that room. I like the building a lot but it's the loan rates I don't like. I am looking at an SBA loan as there are some great advantages by not having to put more than 10% down. It's an industrial park as well so better situation not having all the tire kickers stop in for stripes on their Camaro, lol!

 

[netsol]

we have between 5000-6000 we thought we would never outgrow...

i wish i could move the woodworking AND THE DUST across the parking lot

2 dust collection systems help quite a bit

 

[Notarealsignguy]

When it comes to purchasing by a seperate LLC, it still works the same way as passthrough income. There's no real tax advantage unless you are doing something shady . You're taking $5k out of your right hand and calling it an expense but when you put it in your left hand it is income. You can't claim your mortgage payment as an expense, only the interest and depreciation. Mortgage principal payments go on the balance sheet You also have to pay sales tax on that rent money if you are paying it out to a seperate entity. AFAIK, the advantage to have property in a different company is to limit liability and only that goes so far too.

 

[Gino]

Buy now, while you can still afford it. About renting spaces ut for whatever, don't count on that. Insurance for lot storage is expensive. That's a lotta liability. The best you could hope for would be a cell phone tower or a billboard going up on the property. Your utilities shouldn't be too bad, but with the whole building being about 16'.... you will lose a lotta heat in the winter, unless you have fans and blowers placed correctly. Our shop is 10k sq ft and this year was the highest bills yet, and we're having a warm winter. Just the utilities have been climbing fast in the last year or 2.

 

[netsol]

Buy now, while you can still afford it. About renting spaces ut for whatever, don't count on that. Insurance for lot storage is expensive. That's a lotta liability. The best you could hope for would be a cell phone tower or a billboard going up on the property. Your utilities shouldn't be too bad, but with the whole building being about 16'.... you will lose a lotta heat in the winter, unless you have fans and blowers placed correctly. Our shop is 10k sq ft and this year was the highest bills yet, and we're having a warm winter. Just the utilities have been climbing fast in the last year or 2.

natural gas has been very expensive, which is interesting, since much of the winter has been short sleeve shirt weather

 

[Zendavor Signs]

The payoff for buying your own building is long-term. You likely will not see any benefit for 10+ years, but you are putting your money towards something that has value. Definitely talk to your CPA and crunch some numbers. We bought our building 20 years ago, and it is paying off nicely now with passive income. And when I retire/sellout, hopefully I can get a small chunk for the building. That, of course, is a big gamble. Some here have mentioned taxes, utilities, etc. We always had a triple net deal when we rented, our landlord never covered anything, so that was not a factor for us. We were already paying all of that.

 

[47CP]

When it comes to purchasing by a seperate LLC, it still works the same way as passthrough income. There's no real tax advantage unless you are doing something shady . You're taking $5k out of your right hand and calling it an expense but when you put it in your left hand it is income. You can't claim your mortgage payment as an expense, only the interest and depreciation. Mortgage principal payments go on the balance sheet You also have to pay sales tax on that rent money if you are paying it out to a seperate entity. AFAIK, the advantage to have property in a different company is to limit liability and only that goes so far too.

Besides taxes, the biggest reason to buy in a LLC (or some separate entity) is for resale options down the line. If you don't you can kind of lock yourself up....our last leased building was owned by a family company and in the name of said company. They wanted to wind up the company, the founder has passed on, etc but they couldn't sell the building without closing the company first, and couldn't wind up the company while it still owned the building (without abandoning it andbeing liable for it and property taxes anyway).

In order for it to work, they had to find a buyer who would lease back their part of it while they wound up and this limited buyers quite a bit which hurt them on resale value.

DaveW

 

[F1225hgB42w]

When it comes to purchasing by a seperate LLC, it still works the same way as passthrough income. There's no real tax advantage unless you are doing something shady . You're taking $5k out of your right hand and calling it an expense but when you put it in your left hand it is income. You can't claim your mortgage payment as an expense, only the interest and depreciation. Mortgage principal payments go on the balance sheet You also have to pay sales tax on that rent money if you are paying it out to a seperate entity. AFAIK, the advantage to have property in a different company is to limit liability and only that goes so far too.

This is inaccurate - the principle payments become an asset, not profit. You depreciate the asset so you show zero profit. If you show a net loss on the LLC, you can then use that as a future hedge against taxes for your personal income you make your other business that is the renter (sounds like you make signs). You will face the taxes on income when you actually sell the property, but then you should roll it into a Like-Kind Exchange to avoid any "income" taxes or capital gains.

As for sales tax, some states don't have a sales tax (Oregon, Washington, Montana, Alaska, Delaware, and New Hampshire). Some states exempt rental rates from sales tax (as they already collect property taxes) and that is the case in my state. We don't pay (as the renter) or remit (as the landlord) a sales tax, we pay a property tax which is factored into our triple nets for our rental agreement. I would assume most states that have a property tax do the same, but you would want to check what your local laws are regarding sales tax on rent payments. The big deal in Washington is that the lease needs to be for more than 30 days to avoid the sales tax (we set up our lease for 10 years - so again check your local laws).

Also, a great way to reduce profit on the LLC (IE create a loss to shelter taxes on your other business) is to include your children (if you have any) as employees for "Maintenance and Management Services" - and pay them up to $12,950.00 per year tax free to them (put it into a money market for college or a ROTH-IRA since they will get a W2) and you can also deduct that from your business income as an operating expense.

There are several more advantages to setting up an LLC, but you shouldn't take the word of someone (me) on a sign forum, find yourself a good accountant so you can learn all the benefits that are available due to corrupt politicians crafting loopholes for wealthy donors/lobbyists - they exist and YOU SHOULD take advantage of every legal tax deduction you can.

DISCLAIMER - I'M NOT A TAX ADVISOR OR ANY TYPE OF ACCOUNTANT, I JUST DON'T LIKE WASTING MY MONEY BY GIVING IT TO THE GOVERNMENT WHEN IT'S NOT LEGALLY REQUIRED. DO YOUR OWN RESEARCH TO MAKE SURE YOU FOLLOW ALL LAWS.

 

[Notarealsignguy]

This is inaccurate - the principle payments become an asset, not profit. You depreciate the asset so you show zero profit. If you show a net loss on the LLC, you can then use that as a future hedge against taxes for your personal income you make your other business that is the renter (sounds like you make signs). You will face the taxes on income when you actually sell the property, but then you should roll it into a Like-Kind Exchange to avoid any "income" taxes or capital gains.

As for sales tax, some states don't have a sales tax (Oregon, Washington, Montana, Alaska, Delaware, and New Hampshire). Some states exempt rental rates from sales tax (as they already collect property taxes) and that is the case in my state. We don't pay (as the renter) or remit (as the landlord) a sales tax, we pay a property tax which is factored into our triple nets for our rental agreement. I would assume most states that have a property tax do the same, but you would want to check what your local laws are regarding sales tax on rent payments. The big deal in Washington is that the lease needs to be for more than 30 days to avoid the sales tax (we set up our lease for 10 years - so again check your local laws).

Also, a great way to reduce profit on the LLC (IE create a loss to shelter taxes on your other business) is to include your children (if you have any) as employees for "Maintenance and Management Services" - and pay them up to $12,950.00 per year tax free to them (put it into a money market for college or a ROTH-IRA since they will get a W2) and you can also deduct that from your business income as an operating expense.

There are several more advantages to setting up an LLC, but you shouldn't take the word of someone (me) on a sign forum, find yourself a good accountant so you can learn all the benefits that are available due to corrupt politicians crafting loopholes for wealthy donors/lobbyists - they exist and YOU SHOULD take advantage of every legal tax deduction you can.

DISCLAIMER - I'M NOT A TAX ADVISOR OR ANY TYPE OF ACCOUNTANT, I JUST DON'T LIKE WASTING MY MONEY BY GIVING IT TO THE GOVERNMENT WHEN IT'S NOT LEGALLY REQUIRED. DO YOUR OWN RESEARCH TO MAKE SURE YOU FOLLOW ALL LAWS.

Principal payments become an asset, I already said that, payments go to the balance sheet for assets not the P&L i.e. not an expense. They reduce the loans amount. Depreciation of the buildings are an expense and reduce profit but there's still profit in the separate LLC. You can not depreciate the land, not saying people don't but in an audit, they're gonna back it out and that's usually worth a lot more than a depreciated building. Adding your kids to payroll? I thought I had in there legal deductions but forgive me if I left off the legal part. You claim whatever you want for taxes and will likely get away with it. I have a good accountant. Maybe we all have to pay all of these taxes due to corrupt business owners that ignore the laws and do whatever they want?

 

[F1225hgB42w]

Principal payments become an asset, I already said that, payments go to the balance sheet for assets not the P&L i.e. not an expense. They reduce the loans amount. Depreciation of the buildings are an expense and reduce profit but there's still profit in the separate LLC. You can not depreciate the land, not saying people don't but in an audit, they're gonna back it out and that's usually worth a lot more than a depreciated building. Adding your kids to payroll? I thought I had in there legal deductions but forgive me if I left off the legal part. You claim whatever you want for taxes and will likely get away with it. I have a good accountant. Maybe we all have to pay all of these taxes due to corrupt business owners that ignore the laws and do whatever they want?

Buddie, you should change your name from notarealsignguy to notafinanceguy...

1) Adding children to your payroll is perfectly legal. It takes a few minutes to google this to verify it:

Hiring Your Kids to Work for You Can Result in Significant Tax Savings.

Do you have your teenage kids helping you at the office? If so, you might want to consider putting them on payroll and save on taxes

www.oberlanderandco.com

How to Pay Your Kids in Your Business | Mark J. Kohler

Paying your children for working in the business has to be one of the most underutilized tax strategies by family businesses today.

markjkohler.com

Council Post: What To Consider When Adding Your Children To The Payroll

Before implementing this advanced tax strategy, consider the fine print.

www.forbes.com

Putting Your Kids On The Payroll Can Benefit Your Business AND Help You Save Big Money On Your Taxes

Paying your children—whether they’re tweens, teens, or young adults—to work for your company is one of the greatest advantages of running a family business. By hiring your kids, you can help them develop a strong work ethic, give them experience managing money, and jumpstart their ability to save fo

www.linkedin.com

How and Why You Should Put Your Children on Payroll to Save $12,000 a Year

Discover childhood memories and family business impact on success and taxes

www.milliondollarsellers.com

https://www.taxslayer.com/blog/hiring-your-child-small-business-self-employed-taxes/

2) You depreciate the land by using a cost segregation study to reclassify parts of your land (such as a parking lot, landscaping, sidewalks, etc.) The IRS recommends that a cost segregation study be done EVERY TIME a property is sold, even if the property recently had one performed. This will ensure that each owner’s tax situation is properly evaluated. A cost segregation study creates a substantial loss that will allow you to carry it over for the next 5 years. We did this and it allowed my family members who were over 70 to fully absorb the ordinary income generated by a $500,000.00 IRA distribution. Plus we were able to pass through additional losses for up to 5 years. Our building was more expensive than the budget the op is looking at so his milage will vary.

3) You should not show profit unless you are overpaying your LLC. Why create profit when you don't need to? Do you like giving more taxes to the Government? Again, only a fool pays more in taxes than they should. Your money would be much better spent by donating to a charity or literally wiping your ass with it, lighting it on fire, and flushing it down the toilet. You were totally wrong in your first post saying that you there isn't benefit from creating an LLC to own the building and renting it to your other business. We save tons in taxes by having an LLC post a loss which can be carried over to our other business to decrease or tax burden.

4) I don't know if you have a good accountant or not, but it appears either way I have a far better one.

The only criminal thing I've done is point out how much of a fool Notarealsignguy is.

 

[Notarealsignguy]

Buddie, you should change your name from notarealsignguy to notafinanceguy...

1) Adding children to your payroll is perfectly legal. It takes a few minutes to google this to verify it:

Hiring Your Kids to Work for You Can Result in Significant Tax Savings.

Do you have your teenage kids helping you at the office? If so, you might want to consider putting them on payroll and save on taxes

www.oberlanderandco.com

How to Pay Your Kids in Your Business | Mark J. Kohler

Paying your children for working in the business has to be one of the most underutilized tax strategies by family businesses today.

markjkohler.com

Council Post: What To Consider When Adding Your Children To The Payroll

Before implementing this advanced tax strategy, consider the fine print.

www.forbes.com

Putting Your Kids On The Payroll Can Benefit Your Business AND Help You Save Big Money On Your Taxes

Paying your children—whether they’re tweens, teens, or young adults—to work for your company is one of the greatest advantages of running a family business. By hiring your kids, you can help them develop a strong work ethic, give them experience managing money, and jumpstart their ability to save fo

www.linkedin.com

How and Why You Should Put Your Children on Payroll to Save $12,000 a Year

Discover childhood memories and family business impact on success and taxes

www.milliondollarsellers.com

https://www.taxslayer.com/blog/hiring-your-child-small-business-self-employed-taxes/

2) You depreciate the land by using a cost segregation study to reclassify parts of your land (such as a parking lot, landscaping, sidewalks, etc.) The IRS recommends that a cost segregation study be done EVERY TIME a property is sold, even if the property recently had one performed. This will ensure that each owner’s tax situation is properly evaluated. A cost segregation study creates a substantial loss that will allow you to carry it over for the next 5 years. We did this and it allowed my family members who were over 70 to fully absorb the ordinary income generated by a $500,000.00 IRA distribution. Plus we were able to pass through additional losses for up to 5 years. Our building was more expensive than the budget the op is looking at so his milage will vary.

3) You should not show profit unless you are overpaying your LLC. Why create profit when you don't need to? Do you like giving more taxes to the Government? Again, only a fool pays more in taxes than they should. Your money would be much better spent by donating to a charity or literally wiping your ass with it, lighting it on fire, and flushing it down the toilet. You were totally wrong in your first post saying that you there isn't benefit from creating an LLC to own the building and renting it to your other business. We save tons in taxes by having an LLC post a loss which can be carried over to our other business to decrease or tax burden.

4) I don't know if you have a good accountant or not, but it appears either way I have a far better one.

The only criminal thing I've done is point out how much of a fool Notarealsignguy is.

Ok so first off, you have no clue on how bookkeeping and accounting works.
1. You've obviously never been audited.
2. You obviously don't carry workers comp if you have kids on your payroll.
3. You don't understand the difference between a P&L vs a Balance Sheet
4. You have a shady accountant.
5. I said buildings can be depreciated, sorry I didn't mention your sidewalks, I guess I should have said improvements.
6. Why would you want to pay payroll taxes on your children?
7. You read too many books.
8. Employing children is a violation of child labor laws, they don't care whose kids they are or if they actually work.
9. Accounting is very similar to physics, matter can neither be created nor destroyed.
10. If you have 2 LLCs and 1 carries an asset and liability (a loan since you don't understand finance very well) and the other pays rent, that rent money is income. You can offset with depreciation but that liability is not a tax deduction.
11. Yes, we all understand the golden rule of not paying more taxes than needed, refer back to line #7.
12. I have a good accountant and a good attorney. Both of which I consult on a regular basis.
13. If you are in the sign business, you should have a garage liability policy. It is based on risk PLUS your number of employees. Ours costs about $2000/head per year so the insurance alone would eat up any shady tax savings.
14. Don't be so presumptuous. You're not as smart as you think you are.
7. You read too many books.

 

[Notarealsignguy]

If you take $1000 from your Right Hand LLC thats an expense, when you put it in your Left Hand LLC it's income. It's a wash. An LLC is passthrough. Like I said accounting is like physics.
You don't need a second LLC to depreciate or write of maintenance expenses. It makes zero difference if your main company owns your building or if you have 2 and rent it to yourself.

 

[F1225hgB42w]

Ok so first off, you have no clue on how bookkeeping and accounting works.
1. You've obviously never been audited.
2. You obviously don't carry workers comp if you have kids on your payroll.
3. You don't understand the difference between a P&L vs a Balance Sheet
4. You have a shady accountant.
5. I said buildings can be depreciated, sorry I didn't mention your sidewalks, I guess I should have said improvements.
6. Why would you want to pay payroll taxes on your children?
7. You read too many books.
8. Employing children is a violation of child labor laws, they don't care whose kids they are or if they actually work.
9. Accounting is very similar to physics, matter can neither be created nor destroyed.
10. If you have 2 LLCs and 1 carries an asset and liability (a loan since you don't understand finance very well) and the other pays rent, that rent money is income. You can offset with depreciation but that liability is not a tax deduction.
11. Yes, we all understand the golden rule of not paying more taxes than needed, refer back to line #7.
12. I have a good accountant and a good attorney. Both of which I consult on a regular basis.
13. If you are in the sign business, you should have a garage liability policy. It is based on risk PLUS your number of employees. Ours costs about $2000/head per year so the insurance alone would eat up any shady tax savings.
14. Don't be so presumptuous. You're not as smart as you think you are.
7. You read too many books.

Last reply, I don't want to hijack this thread. I will provide you with a little reading (it's a bummer you think reading is bad):

1-4. Personal attacks which are like everything else you've written, inaccurate (most likely malicious). It doesn't really matter to me what you think I do or do not know.

5. You are lying, you said "You can not depreciate the land." which is inaccurate (I figured it's just your incompetence, not malicious). I provided you with specifics on how to do it, and linked to the IRS website as a reference. So again you were wrong.

6. I don't. This is again something you clearly know nothing about. Here is the IRS explaining why the laws allow you to avoid payroll taxes on your kids if employed in an LLC. https://www.irs.gov/businesses/small-businesses-self-employed/family-help

Maybe you should let the IRS know they are wrong because you didn't know about these (AGAIN LEGAL) loopholes.

7. Maybe. I don't think being well read is a bad thing. Clearly you do, and it shows.

8. Wrong again - Here is where you should learn to read (or maybe ask that lawyer you consult with so often) - https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/FairLaborStandAct.pdf - Sec. 213 is Exceptions and states that:

Minors under age 16 working in a business solely owned or operated by their parents or by persons standing in place of their parents, can work any time of day and for any number of hours. However, parents are prohibited from employing their child in manufacturing or mining or in any of the occupations declared hazardous by the Secretary of Labor.

9. Since you don't seem to know much about business/taxes/accounting - I'm just going to assume you are also not a physicist... If I'm WRONG on that, go ahead and share your degrees.

10. Maybe you don't understand the difference between INCOME and REVENUE - the rent is REVENUE to the landlord LLC. The landlord LLC deducts expenses of the LLC (legal, maintenance, management, depreciation, interest paid on the liability, etc.) and you don't show any INCOME.

11. I won't even respond to this.

12. Congrats. Maybe you should ask the lawyer about child labor laws, since you don't seem to know them very well.

13. You are dumb, I said employee your kids in the LLC, not the sign business. Also, the tax benefit is $12,950.00 per kid for 2022 (and goes to $13,850.00 for 2023), so since you seem to struggle with numbers your $2000.00 insurance is WAY less than the tax savings... If you are wondering where that number comes from, here you go: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023

14. A waste of my time, I have better shit to do.

 

[Notarealsignguy]

Last reply, I don't want to hijack this thread. I will provide you with a little reading (it's a bummer you think reading is bad):

1-4. Personal attacks which are like everything else you've written, inaccurate (most likely malicious). It doesn't really matter to me what you think I do or do not know.

5. You are lying, you said "You can not depreciate the land." which is inaccurate (I figured it's just your incompetence, not malicious). I provided you with specifics on how to do it, and linked to the IRS website as a reference. So again you were wrong.

6. I don't. This is again something you clearly know nothing about. Here is the IRS explaining why the laws allow you to avoid payroll taxes on your kids if employed in an LLC. https://www.irs.gov/businesses/small-businesses-self-employed/family-help

Maybe you should let the IRS know they are wrong because you didn't know about these (AGAIN LEGAL) loopholes.

7. Maybe. I don't think being well read is a bad thing. Clearly you do, and it shows.

8. Wrong again - Here is where you should learn to read (or maybe ask that lawyer you consult with so often) - https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/FairLaborStandAct.pdf - Sec. 213 is Exceptions and states that:

Minors under age 16 working in a business solely owned or operated by their parents or by persons standing in place of their parents, can work any time of day and for any number of hours. However, parents are prohibited from employing their child in manufacturing or mining or in any of the occupations declared hazardous by the Secretary of Labor.

9. Since you don't seem to know much about business/taxes/accounting - I'm just going to assume you are also not a physicist... If I'm WRONG on that, go ahead and share your degrees.

10. Maybe you don't understand the difference between INCOME and REVENUE - the rent is REVENUE to the landlord LLC. The landlord LLC deducts expenses of the LLC (legal, maintenance, management, depreciation, interest paid on the liability, etc.) and you don't show any INCOME.

11. I won't even respond to this.

12. Congrats. Maybe you should ask the lawyer about child labor laws, since you don't seem to know them very well.

13. You are dumb, I said employee your kids in the LLC, not the sign business. Also, the tax benefit is $12,950.00 per kid for 2022 (and goes to $13,850.00 for 2023), so since you seem to struggle with numbers your $2000.00 insurance is WAY less than the tax savings... If you are wondering where that number comes from, here you go: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023

14. A waste of my time, I have better shit to do.

I must have missed the part where you came after me. Straight from the IRS, land is not depreciable. Children are not exempt from withholding.
They fall under the same labor restrictions as any other employee. Paying kids who don't work to avoid taxes would likely be considered tax evasion if you were audited
You keep saying there is no income to a land hiding LLC, there is. You came at me and what I said was there is no tax benefit to buying your property in a separate LLC, it's a wash except you will likely pay sales tax on the rent and will have to pay 2 liability policies, 1 for each LLC. As far as expensing, you can take the same depreciation, tax and interest, maintenance expenses whether you hold the company in your business LLC or land LLC.
Better shit to do at 2am? Like what? Go kick the dog in a fit of rage?