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Old 09-06-2014, 07:18 PM   #57
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I recently made on offer on a MH that was registered in Montana LLC. My bank was going to cut the check to the seller making the LLC the Payee. The seller did not want this since they did not have a bank account with the LLC to cash the check and were also worried it might draw some IRS scrutiny as they had recently been audited. The deal did not get done.
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Old 09-06-2014, 09:52 PM   #58
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It all depends on what your home state laws say about how long a vehicle can remain in the state before requiring a home state license. Mine says 6 months so I make sure my MH does not stay in the state 6 months. Bennett law firm will research your states laws and tell you if it is legal
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Old 09-07-2014, 07:54 AM   #59
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I recently made on offer on a MH that was registered in Montana LLC. My bank was going to cut the check to the seller making the LLC the Payee. The seller did not want this since they did not have a bank account with the LLC to cash the check and were also worried it might draw some IRS scrutiny as they had recently been audited. The deal did not get done.

The sale of the RV should not have drawn any particular scrutiny from the IRS unless the seller had it in a business. Considering the fact the seller had just gone through an audit I don't see where this should have been an issue. It sounds to me like someone got hosed in the audit and now they are gun shy to do anything. The simple cure would have been for them to open an account in the name of the LLC, sell the RV, and then take the money to close the account. The sale of a personal asset is not something that normally brings any scrutiny from the IRS unless the asset is a collectible and there aren't many of us out here in RV land that have collectible rigs.
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Old 09-07-2014, 05:18 PM   #60
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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]
1 problem would be to get the RV to Montana to have it inspected. 2nd problem would be to show a business purpose...without that it would be consisted a sham transaction and not recognized by the tax authorities. 3rd would be the need to file annual reports or state tax returns...since there is no income a Federal return is not required. And yes, interest would be deductible if the RV qualifies as your primary or second home. 4th....almost forgot...I heard that some states -- not necessarily the state in which the LLC is formed -- are going after the LLCs for the fuel or road use taxes charged commercial,carriers!
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Old 09-07-2014, 05:32 PM   #61
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The sale of the RV should not have drawn any particular scrutiny from the IRS unless the seller had it in a business. Considering the fact the seller had just gone through an audit I don't see where this should have been an issue. It sounds to me like someone got hosed in the audit and now they are gun shy to do anything. The simple cure would have been for them to open an account in the name of the LLC, sell the RV, and then take the money to close the account. The sale of a personal asset is not something that normally brings any scrutiny from the IRS unless the asset is a collectible and there aren't many of us out here in RV land that have collectible rigs.
I agree completely. I will say however that as an owner of an LLC (not for my coach) the IRS will get a notification when that deposit hits the bank so having been audited once myself I'm not looking forward to another Proctologist exam.
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Old 09-07-2014, 05:48 PM   #62
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Some Montana facts;

There is no vehicle inspection in Montana.

There is a business purpose stated when the attorney files the LLC papers with the state.

No state or federal tax forms are filed as the LLC has no income, no expenses and no bank accounts.

If you sell your RV, the check does not go through the LLC, it comes to you as the sole owner of the LLC.

It is 100% legal in Montana, but it may or may not be legal in your domicile state.

One needs to be very careful to comply with your domicile state's laws.
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Old 09-07-2014, 05:55 PM   #63
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An LLC is not a corporation nor is it a business. An LLC is an asset protection entity that has no tax standing. For tax purposes an LLC is called a disregarded entity. Forming an LLC does not create a business nor does it create a corporation.

The downsides to a Montana LLC are few if you are a full timer. If you have a full time residence that is not your RV, then the downsides are many and complex.
Under IRS laws/rules an LLC is not a "corporation", it's a company even though you have to incorporate to form it. WA state also says it's a company
And yes, if you are a resident of states other then the one you formed the LLC then you are most likely in violation of their laws.
WA also is pursuing illegally registered vehicles using LLC's to hide assets.
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Old 09-07-2014, 06:41 PM   #64
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I am more like wnytaxman in that I want to pay just enough to be completely legal. No ethics involved. I don't under report my income because I do t want to be hassled by authorities.

Like Apple paying 8% tax in Ireland is completely legal yet law makers are saying pretty please pay higher rates. Why should they? Apple has a fiduciary responsibility to its share holders. They should pay the least amount possible allowed by law.

We all know that eventually the law will change so apple and all off shore subs must report in U.S. jurisdiction even though they aren't.

Same with Montana plates on RVs. Before it was either legal or simply ignored. Now states are finding ways to take away as much as they can and you and I will have to pay what they say we have to pay "or else" and they have way more lawyers on their side than I do. So I pay and enjoy my life. Still better that Russia or Europe when taxes are higher and laws more restrictive.

Everyone will choose their tolerance for risk. Mine is pretty low, too busy enjoying life and anyway I ask myself "how do I want to spend my time?"
I found myself agreeing with a lot of this. But I'm not sure the West won the Cold War on communism. I believe Russia now has a flat tax of something like 15%.

A lesson for those trying to avoid high tax and registration fees might be that if you vote for big government don't be surprised if you get big government. And big government is paid for with big taxes and fees. If you don't want to pay the costs move to a state that charges less but may provide fewer services an/or smaller state employee pensions, for example. My big issue stems from how "fair shares" are calculated.

Anyway, there is no free lunch in economics.

And as government at all levels grows I expect future years will see RV users charged new fees. Possibly under the argument you harm the roads and pollute more (no, I don't think they'll stop at fuel surcharges. And RVers will be an easy target as a majority of people, when faced with a state proposition in California for example, will not worry about a 5% surcharge on RV registrations because they don't own an RV. With apologies to Martin Niemöller.
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Old 09-07-2014, 06:59 PM   #65
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Some Montana facts;

There is no vehicle inspection in Montana.

There is a business purpose stated when the attorney files the LLC papers with the state.

No state or federal tax forms are filed as the LLC has no income, no expenses and no bank accounts.

If you sell your RV, the check does not go through the LLC, it comes to you as the sole owner of the LLC.

It is 100% legal in Montana, but it may or may not be legal in your domicile state.

One needs to be very careful to comply with your domicile state's laws.
Most banks will only cut the check to the name on the title. If that is an LLC you will need a bank account established for the LLC and deposit the check, then withdraw the funds or whatever. Not a big deal but it's the way it is. If your looking at a coach titled under an LLC ask your lender who they will cut the check to and advise the seller of their answer before you get to far. There are many ways to reduce taxes. Some are misunderstood and confusing at best. As others have stated it's not a one size fits all formula. Do your homework for your individual situation. Get informed as much as possible and evaluate the risk & reward.
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Old 09-07-2014, 07:02 PM   #66
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Most banks will only cut the check to the name on the title. If that is an LLC you will need a bank account established for the LLC and deposit the check, then withdraw the funds or whatever. Not a big deal but it's the way it is. If your looking at a coach titled under an LLC ask your lender who they will cut the check to and advise the seller of their answer before you get to far. There are many ways to reduce taxes. Some are misunderstood and confusing at best. As others have stated it's not a one size fits all formula. Do your homework for your individual situation. Get informed as much as possible and evaluate the risk & reward.
And the money deposited in the name of the LLC will probably be taxable as income, and yes, the IRS will need paperwork from the LLC then.
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Old 09-08-2014, 08:17 AM   #67
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And the money deposited in the name of the LLC will probably be taxable as income, and yes, the IRS will need paperwork from the LLC then.

First off, the IRS does NOT get notification of every bank deposit. The only bank deposits that get IRS scrutiny are those that are in cash and in excess of $10,000 in any given year. The fact that someone sells a personal asset does not create taxable income. If the asset, such as an RV, is in a business then yes, you would have tax implications. Just selling your personal asset will not be a taxable event.

LLC's are formed all the time to protect assets. The urban legend that all LLC's are businesses and must have bank accounts and conduct business is just plain wrong. Purchasing an RV through an LLC may or may not be legal, but that is dependent on the laws of your resident state, not the IRS.
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Old 09-08-2014, 11:05 AM   #68
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First off, the IRS does NOT get notification of every bank deposit. The only bank deposits that get IRS scrutiny are those that are in cash and in excess of $10,000 in any given year. The fact that someone sells a personal asset does not create taxable income. If the asset, such as an RV, is in a business then yes, you would have tax implications. Just selling your personal asset will not be a taxable event.

LLC's are formed all the time to protect assets. The urban legend that all LLC's are businesses and must have bank accounts and conduct business is just plain wrong. Purchasing an RV through an LLC may or may not be legal, but that is dependent on the laws of your resident state, not the IRS.
You are correct about the 10K deposit comment. My bad. Those of you buying or selling a MH for less than 10K please disregard my comment about the IRS being notified.
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Old 09-08-2014, 01:58 PM   #69
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You are correct about the 10K deposit comment. My bad. Those of you buying or selling a MH for less than 10K please disregard my comment about the IRS being notified.
Only $10k if it is in cash is required to be reported. Checks are not reported. I don't think most motorhomes are sold for cash. I haven't seen too many Brinks trucks at our local RV Dealers. When a business or a bank receives more than $10,000 in cash they are required to report it to the IRS. The fines are pretty steep for not reporting it so compliance is pretty good or so I'm told. The "cash" business if becoming a thing of the past and now credit card companies are required to report how much each business receives in credit card sales. Not many rocks for the bad guys to hide under anymore!

Now back to the Montana LLC discussion!
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Old 09-08-2014, 05:53 PM   #70
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Just retire and move to the big sky country and save the $ and sleep at night instead of spending the time trying to beat the state out the tax . I think some of the money is used for schools and roads which we need.
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