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LLC or Personal?


Fookz92

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Are there ones that cover aviation? USAA said theirs does not.
-Robert
Now that you mention it, I'm not sure. I used to have a USAA umbrella policy but I don't anymore.
If anyone could answer that, it would be Francis Medler at Travers

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I recently heard another advantage of an LLC, even if it's for sole ownership: I've heard that in areas where sales or use taxes may be an issue, you can transfer ownership of the company and its assets as opposed to selling the aircraft. The aircraft remains the property of the company. 

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1 hour ago, Antares said:

I recently heard another advantage of an LLC, even if it's for sole ownership: I've heard that in areas where sales or use taxes may be an issue, you can transfer ownership of the company and its assets as opposed to selling the aircraft. The aircraft remains the property of the company. 

It's definitely a plus related to being able to add and remove members without affecting asset ownership. It has a downside, though. A buyer would be buying a company, not just an airplane, and may be very hesitant about buying a company without knowing what kind of financial trouble it is inheriting. That may not be a big deal in most light aircraft cases, but the wise buyer may end up doing more due diligence than if buying the airplane from the company. (It is a big deal in more significant purchases)

Edited by midlifeflyer
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2 hours ago, Antares said:

I recently heard another advantage of an LLC, even if it's for sole ownership: I've heard that in areas where sales or use taxes may be an issue, you can transfer ownership of the company and its assets as opposed to selling the aircraft. The aircraft remains the property of the company. 

Practically, yes. Legally, varies. Many states charge sale tax on vehicles as part of an asset sale. I’ve spoke with the BoE in califirnia and confirmed in the case of selling a corp or llc that owns an aircraft sales tax would apply, although the odds of them knowing it happened are low. 

 162_04_2011%20Sales%20Tax%20Consideratio

 

-Robert

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10 hours ago, Guitarmaster said:

Now that you mention it, I'm not sure. I used to have a USAA umbrella policy but I don't anymore.
If anyone could answer that, it would be Francis Medler at Travers

Sent from my XT1585 using Tapatalk
 

 Personal umbrella policies do not cover aviation related accidents. I have an umbrella with USAA, and although USAA offers some incentives if you use Falcon insurance agency for your aviation coverage because of a relationship between the two,  there is no coverage under the umbrella for what happens with your aviation related activities.   If you want more coverage for aviation activities, you must  procure that through the carrier that underwrites your aviation liability policies. 

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On 4/16/2018 at 8:29 AM, RobertGary1 said:

Practically, yes. Legally, varies. Many states charge sale tax on vehicles as part of an asset sale. I’ve spoke with the BoE in califirnia and confirmed in the case of selling a corp or llc that owns an aircraft sales tax would apply, although the odds of them knowing it happened are low. 

 162_04_2011%20Sales%20Tax%20Consideratio

 

-Robert

Most states recognize taxes paid to other states and do not double tax (CA may be an exception).  Further, the sale of shares in the corporate or LLC entity should not be treated as an event subject to a sales or use tax.  I've never paid sales tax on purchase or sale of stock regardless the state where the company is located (either physically or operationally). I believe if states could get away with this, the stock markets would instantly collapse.  Lastly, corporations trade assets routinely without paying sales or use tax. If large multinational companies do this routinely, it would be a double standard to do this to little guys.

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12 minutes ago, Chris K said:

Most states recognize taxes paid to other states and do not double tax (CA may be an exception).  Further, the sale of shares in the corporate or LLC entity should not be treated as an event subject to a sales or use tax.  I've never paid sales tax on purchase or sale of stock regardless the state where the company is located (either physically or operationally). I believe if states could get away with this, the stock markets would instantly collapse.  Lastly, corporations trade assets routinely without paying sales or use tax. If large multinational companies do this routinely, it would be a double standard to do this to little guys.

Look at off shore banking rules if you want to see a dual standard!  One rule for small corporations, another for bigger.--From the other ChrisK

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On 4/16/2018 at 7:12 AM, Antares said:

I recently heard another advantage of an LLC, even if it's for sole ownership: I've heard that in areas where sales or use taxes may be an issue, you can transfer ownership of the company and its assets as opposed to selling the aircraft. The aircraft remains the property of the company. 

I always cringe when I see a plane owned in a company's name bc in Georgia you don't pay sales tax on used vehicles as long as they are person-to-person.  Corporation to individual you pay.  I'm not sure where an LLC fits but I'm betting they'd tax me.  Plus I don't want to own my plane in an LLC so I would be buying the asset not the LLC. I fully get how this could be helpful for a multi-owner scenario. 

Kris(PP thoughts...not sure of legal or tax details so I could certainly be wrong)

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1 hour ago, chrisk said:

Look at off shore banking rules if you want to see a dual standard!  One rule for small corporations, another for bigger.--From the other ChrisK

Yes, definitely a double standard. Corporate jets pay zero sales/use tax and there are tax firms that specialize in this arena. Us little guys could use a tax attorney advocate in our corner. I know in my state (IL), our Use Tax does not benefit general aviation in any way and our general fund where the tax proceeds are directed vaporize like water on the face of the sun.

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1 hour ago, Chris K said:

Most states recognize taxes paid to other states and do not double tax (CA may be an exception).  Further, the sale of shares in the corporate or LLC entity should not be treated as an event subject to a sales or use tax.  I've never paid sales tax on purchase or sale of stock regardless the state where the company is located (either physically or operationally). I believe if states could get away with this, the stock markets would instantly collapse.  Lastly, corporations trade assets routinely without paying sales or use tax. If large multinational companies do this routinely, it would be a double standard to do this to little guys.

You'd literally have to argue that to the Supreme Court if you want the state BOE to change their rule.

-Robert

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I had a conversation with a friend about this the other day and he brought up another aspect. If you're flying the airplane and crash it, the LLC won't do much to protect you. However, if somebody else is flying the airplane, the LLC can help to insulate you if something happens. 

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5 minutes ago, Antares said:

I had a conversation with a friend about this the other day and he brought up another aspect. If you're flying the airplane and crash it, the LLC won't do much to protect you. However, if somebody else is flying the airplane, the LLC can help to insulate you if something happens. 

Maybe possibly. Although its an insured liability either way. I've had airplanes in corp/LLC's before. Its certainly more paperwork and doing something as simple as paying for an annual without running the money through the LLC basically invalidates the LLC. 

-Robert

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