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Posted: 4/27/2015 5:18:38 PM EDT
My dealer recommended I do an LLC..

To those that have gone the LLC route.. What do you do for Federal purposes? Do you just file a Schedule C for the LLC showing no loss or gain? Any other Federal requirements?

Thanks
Link Posted: 4/27/2015 5:22:08 PM EDT
[Last Edit: 4/27/2015 5:22:42 PM EDT by Tirador223]
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.
Link Posted: 4/27/2015 5:29:49 PM EDT
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Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.
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Does this mean you pay $5 instead of $200 for a form 1?
Link Posted: 4/27/2015 6:29:33 PM EDT
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Originally Posted By T1000:


Does this mean you pay $5 instead of $200 for a form 1?
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Originally Posted By T1000:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Does this mean you pay $5 instead of $200 for a form 1?

No.
The only $5 fee is for transfer of Any Other Weapons (AOW's).

All Form 1 "making" of an NFA firearm is $200.
Link Posted: 4/27/2015 6:52:00 PM EDT
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Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.
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Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.
Link Posted: 4/27/2015 7:53:57 PM EDT
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Originally Posted By BuckeyeRifleman:


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.
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Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

A coworker made an llc for all his NFA toys. From talking to him I've decided that I'm making an llc for any new NFA items for 2 reasons:

1. A company costs ~$50 or so to create and a small annual fee. A trust has no annual fee and a higher initial cost - $30 to $2500 depending on if its a canned gun trust or a comprehensive trust.

2. You can sell a company and its assets... So, you can potentially sell your NFA collection to someone in your state w/o paying $200 transfers for each item; you just amend the company paperwork to show the new owner.




Link Posted: 4/27/2015 8:15:33 PM EDT
Apparently in Ohio there are no annual reports to do, and just the initial $125 fee.. That's why I'm asking what the Federal requirements are. If all I have to do is file a $0 gain/loss schedule C every year then an LLC seems pretty easy.

Link Posted: 4/27/2015 8:25:10 PM EDT
[Last Edit: 4/27/2015 8:27:40 PM EDT by Gareth96]
Then there's this...

http://www.myguntrust.com/are-nfa-gun-trusts-being-eliminated.html

As long as there aren't any yearly fees in my state to keep an LLC it seems the way to go..

Talk amongst yourselves..
Link Posted: 4/27/2015 8:40:20 PM EDT
Link Posted: 4/27/2015 8:52:14 PM EDT
I did an LLC in PA.

Here is a link that walked me through the set process in PA and helped some with the tax filing process.
Obviously Ohio may be different so you have to check.

After having done the corp thing years ago, and than carefully looking at the Trust and LLC, the LLC won easily.
Two potential pitfalls, one is if PA implements annual fees that get out of hand and two, obviously the biggest is if the
ATF kills it with a CLEO requirement.

http://glocktalk.com/forums/archive/index.php/t-1407938.html
Link Posted: 4/27/2015 9:47:23 PM EDT
[Last Edit: 4/27/2015 10:55:28 PM EDT by Homeinvader]
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Originally Posted By Krusty783:

A coworker made an llc for all his NFA toys. From talking to him I've decided that I'm making an llc for any new NFA items for 2 reasons:


1. A company costs ~$50 or so to create and a small annual fee. A trust has no annual fee and a higher initial cost - $30 to $2500 depending on if its a canned gun trust or a comprehensive trust.


2. You can sell a company and its assets... So, you can potentially sell your NFA collection to someone in your state w/o paying $200 transfers for each item; you just amend the company paperwork to show the new owner.


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Originally Posted By Krusty783:
Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

A coworker made an llc for all his NFA toys. From talking to him I've decided that I'm making an llc for any new NFA items for 2 reasons:


1. A company costs ~$50 or so to create and a small annual fee. A trust has no annual fee and a higher initial cost - $30 to $2500 depending on if its a canned gun trust or a comprehensive trust.


2. You can sell a company and its assets... So, you can potentially sell your NFA collection to someone in your state w/o paying $200 transfers for each item; you just amend the company paperwork to show the new owner.




Don't hold your breath on #2.

Unless the LLC has some intrinsic value other than the NFA firearms, like it generates income, then there is almost zero chance that someone would be willing to buy the entire LLC rather than just pay the transfer taxes. They would be spending quite a bit more on attorneys to draw up the agreement and they would likely want to have an accountant look at the books to make sure everything is solid. Definitely not worth the expense, effort and risk just to avoid a few hundred bucks in taxes.
Link Posted: 4/27/2015 9:50:40 PM EDT
And so if you don't pay your fee to maintain the LLC it dissolves? Then what do you do with your items?


I see no benefit of a LLC at all.
Link Posted: 4/27/2015 10:39:20 PM EDT
You need Attorney advise in your State...
LLC on the surface just looks like asking for all sorts of issues down the road.

If you Have any kind of business entity you have to file on your income Taxes each year. Why add paper work. Why be on IRS radar ?
Why pay a yearly Fee (if there is one) almost all states have some fee somewhere ? Name Registration, Lic Div, etc...
LLC has members not owners or officers. Not sure how that plays out with other members. My guess is you now have placed a Tax filing burden on anyone else listed within the LLC.
Liability issues may have different standards. See top line.
If you are not active in the Firearms trade under the LLC. The Feds may take issue. Thinking you have created a business entity to circumvent the intent of Fed Law..?

Why ignore sound advise. Being that Attorneys in every state have been embracing the NFA Trust option.
If you are not in Business go with a NFA Trust.
Link Posted: 4/27/2015 11:55:53 PM EDT
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Originally Posted By Homeinvader:


Don't hold your breath on #2.

Unless the LLC has some intrinsic value other than the NFA firearms, like it generates income, then there is almost zero chance that someone would be willing to buy the entire LLC rather than just pay the transfer taxes. They would be spending quite a bit more on attorneys to draw up the agreement and they would likely want to have an accountant look at the books to make sure everything is solid. Definitely not worth the expense, effort and risk just to avoid a few hundred bucks in taxes.
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Originally Posted By Homeinvader:
Originally Posted By Krusty783:
Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

A coworker made an llc for all his NFA toys. From talking to him I've decided that I'm making an llc for any new NFA items for 2 reasons:


1. A company costs ~$50 or so to create and a small annual fee. A trust has no annual fee and a higher initial cost - $30 to $2500 depending on if its a canned gun trust or a comprehensive trust.


2. You can sell a company and its assets... So, you can potentially sell your NFA collection to someone in your state w/o paying $200 transfers for each item; you just amend the company paperwork to show the new owner.




Don't hold your breath on #2.

Unless the LLC has some intrinsic value other than the NFA firearms, like it generates income, then there is almost zero chance that someone would be willing to buy the entire LLC rather than just pay the transfer taxes. They would be spending quite a bit more on attorneys to draw up the agreement and they would likely want to have an accountant look at the books to make sure everything is solid. Definitely not worth the expense, effort and risk just to avoid a few hundred bucks in taxes.

Ill add this, selling an LLC w/ little else than NFA items could easily be construed as tax evasion. There's a reason people who say "you can just sell your llc to a new owner" are always talking hypotheticals and no serious collector or business would dream of operating that way.

In short, both fictitious entities accomplish the same goal through the same process under 18USC. It's state law and small personal situation type stuff that determines what's right for a person.
Link Posted: 4/28/2015 5:37:05 AM EDT
I use my LLC simply because I had it set up prior to trusts becoming publicized. Yearly filing in Texas is 5 minutes online, no fees.
Link Posted: 4/28/2015 6:59:50 AM EDT
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Originally Posted By BuckeyeRifleman:


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.
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Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

I don't want my name on any SBRs.
Link Posted: 4/28/2015 10:08:53 AM EDT
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Originally Posted By Monkey_Wrench:

I don't want my name on any SBRs.
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Originally Posted By Monkey_Wrench:
Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

I don't want my name on any SBRs.


I don't have my name on any of my SBR's, just my trust name (which you can name anything you want). You have to put your LLC name on form 1 SBR's just the same. Or you can just buy factory SBR's if you are really dead set on not having your name on there.
Link Posted: 4/28/2015 10:23:08 AM EDT
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Originally Posted By Number1gun:
You need Attorney advise in your State...
LLC on the surface just looks like asking for all sorts of issues down the road.

If you Have any kind of business entity you have to file on your income Taxes each year. Why add paper work. Why be on IRS radar ?
Why pay a yearly Fee (if there is one) almost all states have some fee somewhere ? Name Registration, Lic Div, etc...
LLC has members not owners or officers. Not sure how that plays out with other members. My guess is you now have placed a Tax filing burden on anyone else listed within the LLC.
Liability issues may have different standards. See top line.
If you are not active in the Firearms trade under the LLC. The Feds may take issue. Thinking you have created a business entity to circumvent the intent of Fed Law..?

Why ignore sound advise. Being that Attorneys in every state have been embracing the NFA Trust option.
If you are not in Business go with a NFA Trust.
View Quote


What?
Link Posted: 4/28/2015 11:22:21 AM EDT
In Ohio it's easy..pay the $150 LLC fee and you're done. I'm not aware of anything paperwork wise that needs to be filed after the creation of the LLC for our purposes here, meaning that you are not establishing a business that is for-profit and produces an income.
Link Posted: 4/28/2015 11:28:04 AM EDT
[Last Edit: 4/28/2015 11:33:09 AM EDT by RenegadeX]
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Originally Posted By mPisi:
I use my LLC simply because I had it set up prior to trusts becoming publicized. Yearly filing in Texas is 5 minutes online, no fees.
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Same here, had one for decades. Prefer it over a trust for a variety of reasons.

Comical though watching all the negative spin....

So many folks new to NFA think it was invented yesterday. LLCs were the primary method for NFA up until about 10 years ago when trusts became popular. They have more acceptance, more case law, and more documented and accepted procedures than trusts. In most states they are cheaper and easier to maintain. Trusts are going to be a complete clusterphuck down the road, and LLC owners will be unaffected.
Link Posted: 4/28/2015 11:49:30 AM EDT
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Originally Posted By BuckeyeRifleman:


I don't have my name on any of my SBR's, just my trust name (which you can name anything you want). You have to put your LLC name on form 1 SBR's just the same. Or you can just buy factory SBR's if you are really dead set on not having your name on there.
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Originally Posted By BuckeyeRifleman:
Originally Posted By Monkey_Wrench:
Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

I don't want my name on any SBRs.


I don't have my name on any of my SBR's, just my trust name (which you can name anything you want). You have to put your LLC name on form 1 SBR's just the same. Or you can just buy factory SBR's if you are really dead set on not having your name on there.

I thought the trust was called "Monkey_Wrench Revocable Living Trust"? I can't name is the "super awesome machine-gun trust"?
Link Posted: 4/28/2015 12:14:25 PM EDT
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Originally Posted By Monkey_Wrench:

I thought the trust was called "Monkey_Wrench Revocable Living Trust"? I can't name is the "super awesome machine-gun trust"?
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Originally Posted By Monkey_Wrench:
Originally Posted By BuckeyeRifleman:
Originally Posted By Monkey_Wrench:
Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

I don't want my name on any SBRs.


I don't have my name on any of my SBR's, just my trust name (which you can name anything you want). You have to put your LLC name on form 1 SBR's just the same. Or you can just buy factory SBR's if you are really dead set on not having your name on there.

I thought the trust was called "Monkey_Wrench Revocable Living Trust"? I can't name is the "super awesome machine-gun trust"?


Make a new trust without your name in it...i.e. "super awesome machine-gun trust"
Link Posted: 4/28/2015 1:39:19 PM EDT
[Last Edit: 4/28/2015 1:39:53 PM EDT by BuckeyeRifleman]
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Originally Posted By Monkey_Wrench:

I thought the trust was called "Monkey_Wrench Revocable Living Trust"? I can't name is the "super awesome machine-gun trust"?
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Originally Posted By Monkey_Wrench:
Originally Posted By BuckeyeRifleman:
Originally Posted By Monkey_Wrench:
Originally Posted By BuckeyeRifleman:
Originally Posted By Tirador223:
I pay an annual fee to the State Corporation Commission ($50, I believe), and that is about it. When I apply for a suppressor, I simply include a copy of the certificate I got when I established the LLC and sign all forms as Tirador223, Manager, and then the name of the LLC. No muss, no fuss. Everything is in the name of the LLC and that name is what gets engraved on SBS, for example. No federal forms as far as gain or loss, none of that.


Not trying to be an ass, but I pay $0 annually with my trust. I fail to see how an LLC has any advantages unless you already have an LLC set up for a private business.

I don't want my name on any SBRs.


I don't have my name on any of my SBR's, just my trust name (which you can name anything you want). You have to put your LLC name on form 1 SBR's just the same. Or you can just buy factory SBR's if you are really dead set on not having your name on there.

I thought the trust was called "Monkey_Wrench Revocable Living Trust"? I can't name is the "super awesome machine-gun trust"?


I'm not an attorney, and it might vary state to state, but per my understanding no. I used my initials, aka "xxx Trust" to be short, but per my understanding "super awesome machine gun trust" would be perfectly legal.

ETA here ya go, naming your trust, apparently it can be anything you want.

https://www.legalzoom.com/articles/how-to-choose-a-name-for-your-trust
Link Posted: 4/28/2015 3:13:05 PM EDT
I love my NFA LLC. It cost $50 to set up and is perpetual with no annual filing or ongoing fees.

The LLC has no income, so I do not see a need to file a return with the State or IRS.

I can add or remove people as I see fit without the need for a notary.

And like was mentioned before, technically since all my LLC has for assets is 3 suppressors, I could just sell the LLC as a whole to someone who wanted my suppressors and no transfer has taken place.
(But I doubt I would ever do that).

Plus I like the fact that any member of the LLC can possess the item without me having to be physically present unlike an Individual registration. (I realize trusts can do this too).
Link Posted: 4/28/2015 3:16:59 PM EDT
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Originally Posted By PineappleDevil:
And so if you don't pay your fee to maintain the LLC it dissolves? Then what do you do with your items?


I see no benefit of a LLC at all.
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What if the LLC owned one or more trusts?
Link Posted: 4/28/2015 3:57:25 PM EDT
i use an llc.

i pay no filing taxes at the end of the year unless i submit it past the deadline,

my LLC is just for NFA items, it generates no income.


i like this route better than the trust route. it is easier for me to maintain and to add people if need be.
Link Posted: 4/28/2015 4:01:44 PM EDT
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Originally Posted By PineappleDevil:
And so if you don't pay your fee to maintain the LLC it dissolves? Then what do you do with your items?


I see no benefit of a LLC at all.
View Quote



what fee to maintain, i never had one,

but i believe the government can reposes all your assets, if you do not file the government will asses you a estimated tax that they pull from somewhere and state you owe this much, unless you file late and state to them that you did not generate any income then you pay the late fee which is like 50 or some odd $. (i know because i filed late one year, and they sent me a bill for like 1 or 2 thousand for estimated tax due)


but as long as you file every year your fine, no need to pay any tax as long as your not actually running a business.


Link Posted: 4/28/2015 4:11:10 PM EDT
[Last Edit: 4/28/2015 4:12:14 PM EDT by EvilApplesauce]
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Originally Posted By Number1gun:
You need Attorney advise in your State...
LLC on the surface just looks like asking for all sorts of issues down the road.

If you Have any kind of business entity you have to file on your income Taxes each year. Why add paper work. Why be on IRS radar ?
Why pay a yearly Fee (if there is one) almost all states have some fee somewhere ? Name Registration, Lic Div, etc...
LLC has members not owners or officers. Not sure how that plays out with other members. My guess is you now have placed a Tax filing burden on anyone else listed within the LLC.
Liability issues may have different standards. See top line.

If you are not active in the Firearms trade under the LLC. The Feds may take issue. Thinking you have created a business entity to circumvent the intent of Fed Law..?

Why ignore sound advise. Being that Attorneys in every state have been embracing the NFA Trust option.
If you are not in Business go with a NFA Trust.
View Quote



LLC does have a owner just depends on what kind of llc you make, and it does not place any burden on anyone else because it is by definition its own entity, meaning that nobody has to put anything extra on their tax form because the LLC has its own tax process to go through. everyone else has their own separate tax information even the owner.


LOLz


maybe Attorneys are embracing that option because they get to charge you a fee to do all the paperwork for that option. lol whereas a an LLC they dont have anything to do with






Link Posted: 4/28/2015 4:58:14 PM EDT
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Originally Posted By Dominion21:


What if the LLC owned one or more trusts?
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Originally Posted By Dominion21:
Originally Posted By PineappleDevil:
And so if you don't pay your fee to maintain the LLC it dissolves? Then what do you do with your items?


I see no benefit of a LLC at all.


What if the LLC owned one or more trusts?


Trusts are not "owned" by anyone. And an LLC cannot be the settlor/grantor of a trust.
Link Posted: 4/28/2015 7:48:58 PM EDT
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Originally Posted By EvilApplesauce:



LLC does have a owner just depends on what kind of llc you make, and it does not place any burden on anyone else because it is by definition its own entity, meaning that nobody has to put anything extra on their tax form because the LLC has its own tax process to go through. everyone else has their own separate tax information even the owner.


LOLz


maybe Attorneys are embracing that option because they get to charge you a fee to do all the paperwork for that option. lol whereas a an LLC they dont have anything to do with






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Originally Posted By EvilApplesauce:
Originally Posted By Number1gun:
You need Attorney advise in your State...
LLC on the surface just looks like asking for all sorts of issues down the road.

If you Have any kind of business entity you have to file on your income Taxes each year. Why add paper work. Why be on IRS radar ?
Why pay a yearly Fee (if there is one) almost all states have some fee somewhere ? Name Registration, Lic Div, etc...
LLC has members not owners or officers. Not sure how that plays out with other members. My guess is you now have placed a Tax filing burden on anyone else listed within the LLC.
Liability issues may have different standards. See top line.

If you are not active in the Firearms trade under the LLC. The Feds may take issue. Thinking you have created a business entity to circumvent the intent of Fed Law..?

Why ignore sound advise. Being that Attorneys in every state have been embracing the NFA Trust option.
If you are not in Business go with a NFA Trust.



LLC does have a owner just depends on what kind of llc you make, and it does not place any burden on anyone else because it is by definition its own entity, meaning that nobody has to put anything extra on their tax form because the LLC has its own tax process to go through. everyone else has their own separate tax information even the owner.


LOLz


maybe Attorneys are embracing that option because they get to charge you a fee to do all the paperwork for that option. lol whereas a an LLC they dont have anything to do with








"Owner" is a practical term, not a legal one. "Members" control the LLC, they do not own it and the distinction is important.

Trusts and LLCs are interchanged here a lot because the process to acquire NFA firearms through them is identical, but there is absolutely no comparison to be made between the two. I hope we all know what a trust is. But an LLC is a business entity designed to shield its members from certain liabilities that would make the business operation too risky for an individual. As such there is a distinct financial separation between the members' personal finances and the LLC's finances. How you fund an LLC and channel assets into it can impact tax liabilities down the road.

Where did the money come from for the NFA firearm? Did the LLC buy it or did the member buy it for the LLC? Is that money a loan to be paid back or is it capital to keep the LLC operating? With a trust, you sell the trust's $20,000 M16 and you as the Grantor can pocket that money and there are no tax consideration other than possible capital gains. For an LLC, the member can control the sale of the $20,000 M16, but the funds generated by the sale still belong to the LLC. For the member to access that money personally risks personal income tax liability on that $20,000.

While the LLC may not earn any money, it does need clear, careful bookkeeping, which a Trust does not. Treating an LLC like a Trust is going to get someone hurt down the road.


Link Posted: 4/28/2015 9:23:59 PM EDT
[Last Edit: 4/28/2015 9:35:01 PM EDT by Gareth96]
So, what are the federal tax requirements for a multi-member LLC if you show no gain/loss? Assuming the members are my wife, brother, & son.

A Form 1065 for the LLC, and K-1 for each member in the LLC showing $0 gain/loss?

Then do the members have to do a Schedule E?

I know about trusts.. I'm trying to learn more about LLCs so I can make an informed decision...
Link Posted: 4/29/2015 11:54:53 AM EDT
[Last Edit: 4/29/2015 6:42:48 PM EDT by Homeinvader]
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Originally Posted By Gareth96:
So, what are the federal tax requirements for a multi-member LLC if you show no gain/loss? Assuming the members are my wife, brother, & son.

A Form 1065 for the LLC, and K-1 for each member in the LLC showing $0 gain/loss?

Then do the members have to do a Schedule E?

I know about trusts.. I'm trying to learn more about LLCs so I can make an informed decision...
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If you aren't filing returns for the LLC, then it means there is absolutely no activity going on either internally or externally, which is likely not the case. You could be missing out on personal deductions.

If the LLC is pass-through, then you do a K-1 for each member and report on your individual 1040,1065 for the LLC as a partnership. LLCs can also operate under corporate reporting, but this is NOT what you'd want to do as it would mean quarterly filings regardless.

Regardless of the lack of actual business income, presumably one is putting money into the LLC so it can actually buy something, like a suppressor or machine gun. That money if used to capitalize the LLC would help establish to a loss by the member, but capital cannot be repaid to the member and is normally used to determine membership percentage or "ownership". A loan by a member to the LLC cannot be written off either direction, but the interest paid by the LLC to the member can. A loan requires an actual loan structure and document to be legal according to the IRS. A loan by one member also becomes the responsibility of all members by membership percentage. If a member leaves the LLC with outstanding loan debt in place, they could owe income tax on their remaining share of that debt.

As easy and cheap as it might be to set-up an LLC, maintaining an LLC requires some bookkeeping and accounting knowledge to derive the benefits as well as avoid the pitfalls. You cannot simply buy stuff with your own funds and declare them LLC assets, you are asking for trouble.

And to separate it further from a Trust, there is absolutely no consideration for your kids to inherit anything. While you can leave them your membership percentage, you are also leaving them your liability. And again, they not not own anything and could not derive any liquidity from it without tax issues.

ETA: Forgot to mention the obvious. We're mostly talking about acquiring NFA firearms in a LLC, but it should be noted that if the LLC ever sells an NFA firearm for more than its cost basis, then a profit has just been made, income which now needs to be reported.

Link Posted: 4/29/2015 2:03:05 PM EDT
[Last Edit: 4/29/2015 2:03:28 PM EDT by awptickes]
An LLC in the Democratic Peoples' Republic of Maryland, must pay $300 to the state every year, for each LLC (certain exemptions apply for farms, but this applies to most LLCs).

Then, the LLC must pay "Personal Property Tax" on everything that the LLC owns. Essentially, the LLC must pay an assessed tax on everything that it has purchased and currently owns. Even in-house designed and machined fixtures, machinery, and work must be assessed at the tax rate. This value depreciates every year, but you still must pay the minimum depreciated value (ie: depreciation stops at a certain point.) until you dispose of the property.

Last year, my LLC paid $300 just "for the privilege of operating a business in Maryland" and then paid $2.6049 on every $100 of assessed property the LLC owns. I'm glad it doesn't own any high-value NFA items -- otherwise I'd have an issue.

TL;DR: LLCs in Maryland aren't the way to go.
Link Posted: 4/29/2015 3:49:47 PM EDT
^^ Thanks, these last two posts have been helpful, and a few others before..

While a LLC in my state is cheap, and there's no filing requirements, that doesn't mean it will remain that way. that combined with the book keeping, and how to buy a suppressor for the LLC and accounting for the Federal taxes.

Seems like the long term burden is a lot higher with the LLC.. so going the trust route.
Link Posted: 4/29/2015 7:49:18 PM EDT
I did the LLC route for my sbr and future NFA goodies.

Here in Texas you do have to file a tax form every year with the State Comptrollers office but it's really easy. It's an online no tax due form and the only penalty is if you file late. Then it's $50.

It was $300 to set up and no other fees as long as you file on time to maintain the corp.
Link Posted: 4/29/2015 7:50:37 PM EDT
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Originally Posted By EvilApplesauce:
i use an llc.

i pay no filing taxes at the end of the year unless i submit it past the deadline,

my LLC is just for NFA items, it generates no income.


i like this route better than the trust route. it is easier for me to maintain and to add people if need be.
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Yep, I posted before reading yours so, ditto.
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