Q: If I create a LLC and make a single Living Trust the only member would that be a disregarded entity?
If I create a LLC and make a single Living Trust the only member would that be a disregarded entity?
What filing status can be declared (if any) to not make it disregarded entity?
Or, do I need to just create two Living Trusts so ensure it is not a disregarded entity?
This is both from a legal (so the LLC is legit and retains limited liability benefits etc) AND a tax perspective.
A: My guess is that this arrangement is unnecessarily complex and you should discuss with a competent attorney in your state what your goals are with this arrangement. Generally LLCs are disregarded entities for taxes. You could elect to have the LLC taxed as a C-Corp if you wanted corporate taxation. Trusts can be drafted to be disregarded or to be their own taxable entity. Trust tax brackets and corporate tax brackets are different from individual tax brackets so make sure what you are doing is actually a net benefit to you. You may be setting your self up for double taxation.
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