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Old 04-09-2014, 12:31 PM   #15
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As the LLC is not a business (as noted above), and therefor can't have any income, I don't see how financing could be in the LLC's name. But that doesn't prevent it from being registered under the LLC name.
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Old 04-09-2014, 12:40 PM   #16
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When I opened my business, I did so using an LLC. My main concern was not about debt liability, it was protecting my family and the personal assets I had accumulated to that point, and in the future.

I don't know what the ramifications of having the RV titled and insured via an LLC., but if it shielded me from frivolous law suits, might be worth the time to investigate.
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Old 04-09-2014, 12:41 PM   #17
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Originally Posted by oakcreekeric View Post
When I opened my business, I did so using an LLC. My main concern was not about debt liability, it was protecting my family and the personal assets I had accumulated to that point, and in the future.

I don't know what the ramifications of having the RV titled and insured via an LLC., but if it shielded me from frivolous law suits, might be worth the time to investigate.
You might be talking about a different kind of LLC than the ones used in Montana specifically for RV registrations.
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Old 04-09-2014, 12:53 PM   #18
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An LLC can be formed in any state which allows them. I believe all 50 states allow LLC's with some variations. Some do not allow what are called single member LLC's. For most of us that would be what we would be forming. Whether or not an LLC would protect the owner from lawsuits is debatable. The LLC owner, called a member, would generally be the person driving the RV and therefore would probably be named in a lawsuit as well as the owner of the RV, which would be the LLC.

From a financing perspective, the member of the LLC would generally have to guarantee the loan so there would be no protection from the liability of the loan for an under water asset.

I would love to hear from some of our lawyer readers on the question about using the LLC for legal protection when the member of the LLC would be driving the unit.
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Old 04-09-2014, 12:54 PM   #19
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sorry... I thought LLC = Limited Liability Corporation

I didn't want to be a sole-proprietor or a "full on" corporation (and the franchiser really frowned on corporations)... LLC seemed the best fit.. but I digress

Carry on...
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Old 04-09-2014, 01:25 PM   #20
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I see that option #3 might be the only problem. It depends on how a state views the LLC. Here in CA, they frown on it and I hear they can be very aggressive in pursuing anything that keeps money out of their pocket.

I had thought about keeping our coach out of CA for 12 months (and using it - we have a vacation home in AZ) to avoid the sales (it's actually called 'use') tax. I could have abided by all the rules (and there are plenty) but when push came to shove, they decided if you satisfied all of the requirements and they can deny your 'claim' (for lack of a better word).

Bottom line is that you are up against the gov'ment...do you feel lucky?...well do you?
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Old 08-22-2014, 11:18 AM   #21
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one more variation on LLC question

Based on what I have already read on this note stream...I am not too eager to proceed. But here goes..

1. Already own motorhome..bought and registered in Arizona. Current replacement value is probably $100-125K

2. Own home and cars etc..in AZ.

3. Spend about 5-6 months a year on road...in Montana and in other states.

4. License plates in Az are based on value..so am still spending $3500 a year.

So based on above..what are pro's/cons and potential savings by proceeding

Thanks.
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Old 08-22-2014, 12:11 PM   #22
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I have two clients who have run into a problem with this this past week. Alabama has gone after both of them for back taxes, penalties and interest. Both both their motorhomes in Montana and formed Montana LLC's. Everything else is owned and registered in Alabama. Both clients were deducting the interest on the motorhomes as second homes. Alabama is not happy with that so now we have to meet with the Revenue Examiner. Gonna be fun.....

By the way, for those in this thread who have commented on LLC's, Montana LLC's having a motorhome as an asset are unusual entities. Normal LLC's can be either a "limited liability partnership" or a "limited liability corporation" depending on the election of the founding members. Single member LLC's file Schedule C on a personal return while 2 or more members require the LLC to file a 1065 partnership return. So this discussion has to be limited strictly to Montana LLC's.
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Old 08-22-2014, 12:31 PM   #23
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The Montana attorney's that set up these LLC's advise that no tax forms need to be filed as the LLC has no income and claims no deductions.
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Old 08-22-2014, 01:18 PM   #24
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Interesting that this thread came up now (again). I am closing on a new2us Discovery this afternoon (private party) and out of interest called America's Mailbox just this morning to see what I had to do to register in South Dakota.

America's Mailbox Americas-Mailbox Home - mail forwarding - Americas-Mailbox offers not only mail forwarding but remote control vehicle registration. Once you have a mailing address set up with them they can essentially handle all the vehicle registration paperwork. You get your tags, plates, new title, etc. in the mail. SD taxes are low, no inspection/emission requirements and you do not have to be present in the state. Just have a valid mailing address (which America's mailbox provides).

Anyone have experience with America's Mailbox. Seems less complicated than a Montana LLC, but likely raises all the same red flags with state revenuers. I don't know that I'd pull the trigger on something like this but man, my state simply rapes people on RVs. Its unconscionable how much $$ many states extort for a vehicle that uses "their" roads so little. No wonder people are starting to look for ways to get out from underneath at least some of the tax burden.
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Old 08-22-2014, 02:01 PM   #25
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Downside of a Montana LLC?

Ardbark, you're comparing apples and oranges. What you're looking at vis a vis South Dakota is changing your *legal domicile* from XX to SD. You will no longer be connected to or have any responsibility toward your former state of domicile. You're moving-- it's that simple. But it's important to keep the distinction in mind between domicile and residence. Though you are domiciled in SD, the State of SD does not require you to reside there. If you're fulltiming, you reside in your RV, wherever that may be. If you're talking about establishing a SD mailing address just to skirt the sales tax but continuing to live in your house in XX, then yes, that would be a similar kind of attempt to skirt yhr tax, IMO.

In the case of the MT LLCs, people are retaining their legal domicile status in whatever State they've been in, but setting up a new legal entity(or "person") specifically to own and be liable for their coach, and choosing to establish domicile for this legal entity in Montana. They personally choose to have no other connection with MT, and have no intent to reside there in the future. You can see the distinction. They have connected their coach to Montana for the sole purpose of skirting tax liability in their personal state of domicile-- avoiding or evading, depending on the point of view.

Courts have long held the propriety of tax avoidance, and the illegality of tax evasion. The line between the two can be very gray and very narrow. My personal opinion is that the whole Montana LLC thing does not pass the smell test.
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Old 08-22-2014, 03:03 PM   #26
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Let me put it this way


Q:Is it legal? (I live in MA)
A: NO, cheating the tax man is never legal

Q:What happens if I never visit Montana?

A: nothing, does nto matter.

Q:When you insure in Montana, what happens if you have to USE your insurance in your state or while traveling?

Q: Should make no difference.. I live in Michigan and have used insurance in a couple other states.

The big thing is the first: It is not legal.. Most states require you register your vehicles in the state of residence and there are a number of states which have gone after Montana LLC folks with a vengeance. When this happens the Treasury decides how much you defrauded them from and assesses you what they think you kept, plus fines, penalities cost and interest.. This can be rather expensive.

In addition to the states which HAVE successfully prosecuted, several other states have, at the least, considered it.. I know at one time Michigan was considering, I do not know what they decided (Since I am registered in MI I'm not worried).

Cheating on your taxes may feel cool.. But them what's got the Gold (The Government) make the rule.[/LIST]
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Old 08-22-2014, 03:55 PM   #27
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Let me put it this way


Q:Is it legal? (I live in MA)
A: NO, cheating the tax man is never legal

Q:What happens if I never visit Montana?

A: nothing, does nto matter.

Q:When you insure in Montana, what happens if you have to USE your insurance in your state or while traveling?

Q: Should make no difference.. I live in Michigan and have used insurance in a couple other states.

The big thing is the first: It is not legal.. Most states require you register your vehicles in the state of residence and there are a number of states which have gone after Montana LLC folks with a vengeance. When this happens the Treasury decides how much you defrauded them from and assesses you what they think you kept, plus fines, penalities cost and interest.. This can be rather expensive.

In addition to the states which HAVE successfully prosecuted, several other states have, at the least, considered it.. I know at one time Michigan was considering, I do not know what they decided (Since I am registered in MI I'm not worried).

Cheating on your taxes may feel cool.. But them what's got the Gold (The Government) make the rule.[/LIST]

I will have to disagree that the Montana LLC is not legal. If you abide by all the laws of your state of domicile and you can document your compliance with those laws then the Montana LLC is perfectly legal. The problem that comes up with the Montana LLC is that people will use the entity strictly as a tax dodge and ignore the laws of their resident state. Whenever someone is dealing with the use of a Montana LLC, they must DOCUMENT their strict adherence to the LAW. No shortcuts or the owner of the LLC will get nipped.

I had one client who got nailed by NYS for using the Montana LLC. It was costly for him. His error was that he could not PROVE his compliance with the NYS vehicle registration laws. If you are going to use the LLC make darn sure you know the laws of your state and you completely document your compliance.

I currently have a NYS residency audit going on with one of my clients. The state is saying that any and all dates that do not have a credit card charge from another state means that the individual was in NYS. I know that is ludicrous but the burden of proof is on the taxpayer so we have a fight on our hands. Again, documentation is critical.
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Old 08-22-2014, 05:01 PM   #28
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For what U save you can buy a piece of land there for $5000 and say it's for a future build,

that help?
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