Full question:
My wife and I plan to buy a house in LAS VEGAS, NV as a rental with my son. My son kicks in 50% and we kick in the other 50%. Do we need to incorporate in GA, NV or both or incorporate at all?
- Category: Real Property
- Date:
- State: Georgia
Answer:
Purchasing real estate in another state does not require a specific legal entity. How you choose to hold title to the property is a personal decision. Typically, husbands and wives hold title to homes as joint tenants with rights of survivorship. They can rent the property to a third party, such as their child.
If three parties are contributing funds but only two will hold title, it’s important to have an agreement outlining how the third party will be compensated or recognized in the property, possibly through a life estate or tenancy. The three parties could also form a business entity, like a corporation or LLC, to purchase and own the property. This entity can then rent the property to one of the owners or to someone else.
These decisions should be carefully considered with the help of a legal and financial advisor, as there may be tax implications and regulatory requirements associated with forming and maintaining a business entity. Consulting with a tax professional or legal counsel is advisable.
If you decide to create a legal entity for the property purchase, it’s not strictly necessary to form it in the state where the property is located. You can form a company in another state and register it as a foreign entity in the state where you are doing business, which allows for local tax compliance.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.