Has anyone got themselves an LLC to own their LSA?

[Nomore767]

Just wondering if anyone has established an LLC for themselves to own.buy their LSA instead of doing it as a private sale?

I know some folks who have gotten a Delaware company to establish an LLC. They can come up with the name (like N123AA, LLC or Jim and Bob Aviation, LLC) which buys the airplane instead of a regular person buying the plane. This means you can avoid State sales tax, property tax etc.

Wondering if anyone has done this and what the pros and cons are, or any pitfalls etc.

[VL Roberts]

You can't avoid state sales tax or other taxes where your aircraft is based just because your aircraft is owned by an LLC formed in Delaware or any other jurisdiction. The reason to form an LLC is if the aircraft is used in a business, such as a rental. If something awful were to happen, your liability is limited to the assets of the LLC and not your personal fortune. If you live in a state other than Delaware there is no real advantage to forming the LLC in Delaware, unless your state has outrageous LLC fees.

[ct4me]

I did the LLC thing because, originally, I was going to do a partnership. But I never grew beyond a partnership of one. I'm not sure about taxes. I think the LLC was more about a liability shield.
I know that my buddies who own airplanes, lawyers and CPAs, told me to do it that way. They (not me) do some sort of leaseback thing that gives some sort of financial advantage.
Here's a link to some info...
http://movableproperty.net/aircraft/man ... ith-an-llc

[dstclair]

First, the following is not legal or tax advice but is only one persons opinion. Consult an appropriately creditialed tax attorney for real advice

An LLC would need to be registered in a non-sales tax state like, say Montana. The LLC would also need to have a business (for profit) purpose. If this were the case, then you'd be home free (from sales tax) if you were a Montanan resident. It gets a bit dicier if you are a resident of another state. It is entirely possible that another state would claim a sales/use tax based on you're personal residency.

You may also find that the LLC does not actually limit your personal liability if you cannot prove the business purpose is real and not just put in place to avoid taxes or other non-business purposes.

Also keep in mind that all sales are registered with the FAA and that database is public. It's not a stretch that counties and states troll the information and act in their best interest.

[Nomore767]

Thanks guys!

[VL Roberts]

As far as sales and personal property taxes are concerned, it doesn't make a bit of difference where the LLC is registered or where the owner of the LLC resides. The only thing that matters is the law of the state where the aircraft is based. It makes no sense to form an LLC to purchase an aircraft that is for personal use only.

[Jack Tyler]

Concur with the last two posts re: an LLC lacking a liability shield, at least for those cases where ownership is for recreational purposes. Suggest you contact AOPA's technical advisory dept. and discuss it further with them. Or if covered by their legal services plan, that's an even better source of info for what corporate ownership of a/c does/does not accomplish.

[Flocker]

Just wondering if anyone has established an LLC for themselves to own.buy their LSA instead of doing it as a private sale?

I know some folks who have gotten a Delaware company to establish an LLC. They can come up with the name (like N123AA, LLC or Jim and Bob Aviation, LLC) which buys the airplane instead of a regular person buying the plane. This means you can avoid State sales tax, property tax etc.

Wondering if anyone has done this and what the pros and cons are, or any pitfalls etc.

Howard, I meant to ask you yesterday - what route did you take on this? LLC?

[MrMorden]

If something awful were to happen, your liability is limited to the assets of the LLC and not your personal fortune.

That's not even actually true. If you are acting as PIC, you can always be named individually in a lawsuit as personally negligent.

[CTLSi]

.......

[Kregster]

This too should not be taken as either legal or accounting advice. I do believe that the LLC does create a "sales tax" harbor. This harbor is not for you however, it is for the next guy. Why worry about the next guy? It makes your plane more valuable and less expensive. If the plane is an asset of an LLC, a buyer can purchase the shares of the LLC (not subject to sales tax) and therefore own the assets of the LLC. This is a very common practice in both boats and planes. It is my understanding, this only applies if sales tax was paid on the assets when purchased. So, if the asset is purchased, sales tax is paid and the asset becomes the 'sole asset of the LLC' then the next buyer would simply purchase the LLC without paying sales tax. This is why most buyers of this type would not want an LLC that was involved in any form of other business because they would be assuming those liabilities. This type of asset is often called a "single purpose entity".

Please consult with your attorney, accountant...

[Nomore767]

Just wondering if anyone has established an LLC for themselves to own.buy their LSA instead of doing it as a private sale?

I know some folks who have gotten a Delaware company to establish an LLC. They can come up with the name (like N123AA, LLC or Jim and Bob Aviation, LLC) which buys the airplane instead of a regular person buying the plane. This means you can avoid State sales tax, property tax etc.

Wondering if anyone has done this and what the pros and cons are, or any pitfalls etc.

Howard, I meant to ask you yesterday - what route did you take on this? LLC?

The question came up as I was contemplating becoming an owner again. I had met someone who mention a group of guys formed an LLC , which they named, and they acquired a Cessna 172.
At the time of the question, I was just curious as to the pros and cons of an LLC and how it affects aircraft ownership. For myself I just acquired the airplane on my own.

A question for CTLSi:-

Your FD CTLSi airplane is registered to an LLC. Can you tell us how and why you did this and what you feel are the pro and cons of such a set up? Is this something you did on your own or are you part of a group of shared owners?

Also, your comment regarding using the plane as a business asset. Can you actually use an LSA as a business asset if you only fly the plane for personal use, or do you use the plane at a flight training school for example?

[Wm.Ince]

A question for CTLSi:-

Your FD CTLSi airplane is registered to an LLC. Can you tell us how and why you did this and what you feel are the pro and cons of such a set up? Is this something you did on your own or are you part of a group of shared owners?

[SportPilot]

.......

[Nomore767]

A question for CTLSi:-

Your FD CTLSi airplane is registered to an LLC. Can you tell us how and why you did this and what you feel are the pro and cons of such a set up? Is this something you did on your own or are you part of a group of shared owners?

Also, your comment regarding using the plane as a business asset. Can you actually use an LSA as a business asset if you only fly the plane for personal use, or do you use the plane at a flight training school for example?


Genuine question for you.

No answer from you….odd.