Realty Land Trust

Realty Land Trust vs LLC Comparison

Benefits of Holding Property in a Real Estate Land Trust

Do you own residential or commercial investment property? Or maybe you’re planning an acquisition or sale. If so, there are tremendous benefits for you when using a real estate trust for title. Many investors are quitting LLCs for title. Along with time and money savings, a real estate trust gives you anonymous ownership in public records. It is the safest way of holding ownership.

A quick comparison (Realty Land Trust vs LLC) of the benefits illustrate just how powerful and effective trusts are for bank account and peace of mind!

Reduced Liability

Realty Land Trust: Yes - property held in a realty land trust is legally isolated from your other assets.

Yes!

Personal Title

No - you are personally liable for any and all risks on the property. All of your personal assets are exposed.

No

LLC

Personal liability is limited by the LLC. However, you must comply with secretary of state regulations, filings, pay fees, and franchise taxes. Any omissions can invalidate your LLC protections.

Yes But...

Isolates Properties

Realty Land Trust: Yes - with title in different trusts, properties are isolated from you, and from each other.

Yes!

Personal Title

No - the property is connected to you personally.

No

LLC

Multiple properties owned by one LLC are connected. Otherwise, you create a new LLC with fees & filing for each property.

Yes But...

Privacy of Ownership

Realty Land Trust: Yes! There is no public record that connects your personal name to the property.

Yes!

Personal Title

Your name and address are part of the public record whether or not you live in that property.

No

LLC

You are indirectly linked to the property because LLC manager's name listed online.

No

Privacy of Sales Price

Realty Land Trust: Yes! If the purchase is executed within a trust, the purchase price can kept private.

Yes!

Personal Title

When you personally take title to real property, the purchase price is either calculated from the transfer tax and/or listed on the PCOR.

No

LLC

When you take title to real property in an LLC, the purchase price is calculated from transfer taxes or displayed in the records.

No

Tax Return Privacy

Realty Land Trust: Yes! Only net rental income appears on your personal tax return.

Yes!

Personal Title

All income and expense plus the property itself is listed on your personal tax return.

No

LLC

All income and expense plus the property itself is listed on your personal tax return.

No

Retain Tax Base

Realty Land Trust: Yes! The seller’s tax base might be retained upon transfer if you time the paperwork right.

Yes!

Personal Title

When you take title in your own name, the tax assessor will re­assess the value of the property.

No

LLC

Special rules apply to LLC transactions and you may not be able to retain the owner’s tax base.

Yes But...

Exempt from Franchise Tax

Realty Land Trust: Yes! You are exempt from paying franchise tax in California.

Yes!

Personal Title

No, but you are personally exposed.

No

LLC

It must pay $800 franchise tax each year.

No

Split Gains & Losses

Realty Land Trust: Yes! You allocate them as determined by ownership percentage.

Yes!

Personal Title

All income and expenses are generally allocated to you personally.

No

LLC

It depends upon the operating agreement.

Yes But...

Property Safe from You

Realty Land Trust: Yes! The property is safely and legally isolated from your personal liens and judgments.

Yes!

Personal Title

Your property is at risk from your personal liens & judgments. Creditors may attach and seize your equity.

No

LLC

Individual LLC membership interests are at risk from seizure or levy by tax authorities or creditors.

No

Anonymous Title

Realty Land Trust: Yes! The County property records display an anonymous trust as the owner.

Yes!

Personal Title

Your full legal name, marital status & residential address displayed for anyone to see. Includes sales price, date, loans, property tax obligation, etc.

No

LLC

Your LLC is easily looked up on the Secretary of State website. Risk of business identity theft and title fraud.

No
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