How To Structure Your Turo Business
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- čas přidán 5. 07. 2024
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What is the best way to structure your Turo car-sharing business? In this video, we'll look at the opportunity Turo has created for entrepreneurs and how it should be treated as a business with the correct entity structure.
We present to you a video on the best structure for a Turo car-sharing business.
Are you running a Turo car-sharing business? Do you want to start a Turo car-sharing business?
No matter what your answer to those questions was, we have the right content you are looking for when marching forward with Turo car sharing.
"What is the best structure for their car-sharing business" 0:09
With the benefits that come with renting your car out to other parties, there are many drawbacks that require a good structure to help aid in your protection.
In just a few minutes, you too can have the answers in your vault.
Tune in to learn how your car can make you money while being protected under the right entity.
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Show Notes:
0:00 Intro
1:32 Limit Liability
4:01 How to structure your turo business
8:12 What you should avoid
12:25 Summary
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ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#Turo #Business #LLC
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Content is above and beyond. Glad I found you. So resourceful
Thanks. Very high quality content, very informative and they way you break it down and speak is very helpful.
I appreciate that!
Clint, Happy I found your channel, I'm just sponging up the info. Keep up the good work.
Welcome aboard!
Clint you have amazing advice, THANK YOU
Thanks for watching!
Awesome Ideas, appreciate your knowledge!
Glad you like them!
Very helpful. Saved video to watch again!
Awesome! Thank you!
Ok, just watched again. If I'm looking to finance a vehicle for turo, would you suggest purchasing it with personal credit, then transfer it to a trust or purchase it with a trust?
Wow! I appreciate all this information. Sir. Thank you 🙏
Thank you so much for this, Clint!
My pleasure!
Thumbs
Up
A
+
Appreciate this!
Awesome
very helpful. you should do more videos on this business!
I will!
This is awesome content thanks
Glad you enjoy it!
100
Percent
The
Best
Great value!
Thank you for the information Clint! You explain and present it to me in a way that allows me to comprehend. Quick question though. I want to try to deploy this tactic, but plan on using Navy fed. How would I go about transferring the title to the trust if I get it with a personal loan with Navy fed. After the DMV sends me the title, they’ll want to be added to the it as the lien holder. Do I transfer it to the trust before I add them as the lien holder ?
What naics code should I be using for my car rental LLC?
Thanks, very high content and information
Glad you think so!
I’m an insurance agent and I own an Insurance Agency. Turo is not car sharing. It’s a car rental business. That’s why most insurance companies do not allow it. Right now Travelers is the company insuring vehicles for Turo. And when you put your car in your business name, it cost more in premium. The only way to get insurance when the car is registered in a business name or LLC is business insurance. Business auto insurance cost a lot more than personal insurance. When hosting on Turo you will need two policies. One with Turo when the vehicle is rented and your personal or business auto policy when it’s not.
Thank you for your comment. This is very helpful.
Can you please explain why other companies do not insure vehicles which are used for turo, if it is covered by turo while rented out?
@@ostertori2010 because they consider it a rental car business. You would have to find an insurer that insures rental car companies or dealers that rent out cars.
If you register the car in a Trust name, you can still have personal insurance, correct?
But if you are just starting out, do you think that is ok to open A? S corp or a C corp if you only have one vehicle
@ClintCoons how would you go about titling and registering at the DMV? If you own the vehicles outright, should the holdings company be the lien holder or lessor and create a lease agreement with the operating company and have them on the title as the registered owner?
Thank you, great info! I was looking for advice as I own a small fleet and all my cars are registered under my llc. Now if i open a new llc to "lease" my cars, does both llc's need to be filed as S or C corp?
The vehicle LLC will be disregarded. Only the operating LLC is treated as an S-Corp.
Nice video OTP 🌹🌹❤️💯
we ended up creating separate entitiy as recommended by AA, however, the FL Motor vehicle does not allow us to register the vehicle under LLC since there is a lender involved.
any rhougjts?
thank you
M,
Ask if you can transfer it into a trust. If so then we should switch out your LLC for a land trust.
I like he say, you gotta wrap your head around this lol
Have a Turo business that’s anonymously owned in the state of Florida and it’s owned by two trusts. One I control and one my fiancé controls. It’s a multi-member business in the state of Florida, so it has charging order protection. The cars in to r anonymously owned as well. Is it worth me making a new business to then lease the cars etc. as u explained when I already have all of this protection?
LLC 1 owns the vehicles and lease them to LLC business who becomes the register owner. HOW TO ACTUALLY MAKE THIS HAPPEN WITH DMV? do i need to take them a lease agreement or i just put LLC 1 name in the lean holder and that is it? Florida
You would need to contact them and inquire as to the procedure.
Thank you Clint for the video However as the margin on the TURO is already slim, having 2 separate LLCs then filing taxes is gonna be a lot expensive. Not worth it.
Nav,
Thanks for watching and the comment.
Nic
Thanks for informative video! An issue I see when switching over from personal ownership to another entity (LLC) is having to pay sales tax again, am I correct on that?
It would depend on your state. In those situations we use a personal property trust to hold title the the PPT is owned by a LLC.
@@ClintCoons let's say California?
you should do more that just asset protection, how to setup your software startup of software consulting business
Clint, one scenario I didn't see quite covered is if the car was financed through a business loan, so the car is already in the name of my LLC. In this scenario, can I create a separate Biz LLC and lease the car to the Biz LLC so that I don't do Turo business in the asset holding entity where the car is financed? If not, what are my options so that I can separate doing business where the car is owned?
You will need to check with your local DMV.
Great video and so informative. One question: even if you don't own the vehicle outright, why not still create the dual entity (one for holding, one for operations), since eventually, as cars are paid off, they may build some equity. Does that not now become an "asset" that a creditor could go after if you are using the lone llc?
No I think just one entity is fine.
Worst customer service ever. We have 2 of our cars out and now have to report them stolen. 5 days of repeated phone calls no help.
Personal property trust strategy sounds kind of like one of your previous real estate videos will you take it out of the LLC sit-up individual Ilc and make it a disregarded pass through entity and tax filings information never changes
Correct
Clint, thank you so much for this incredible information. I've been curious how Anderson Advisors would approach this (I'm currently a Platinum member). I have some follow up questions:
#1 I have a loan on one of my vehicles in my name. Based on what you've described, I should be moving that to a trust owned by an LLC's (California) property trust. How can that be done if I don't have the title yet because the title is held by the lender? I would assume that I would only be changing the registration with the DMV from my name to the name of the trust.
#2 Will the loan company continue to report payments in my name or in the name of the trust?
My goal is to get the loan out of my own name (debt to income ratio problem) so that I can buy another vehicle.
If you can (some states do not allow this) change the registered owner to your trust. Leave the payment reporting on the loan as is.
@@ClintCoons Clint, I'm trying to understand is this the best option for a California Turo business. In California, I'll have to pay the franchise tax for both LLCs.
@@D3master4 Yes you do. Ugh
Just starting a Turo business. Am I doing this approach correctly... If I open an LLC, purchase a car/cars under that LLC, with a line of credit from that business account. The ownership of the car is under my LLC business. Then I wouldn't need to worry about transferring ownership from personal name and the banks questioning the ownership? Is this the right line of thinking? Now I just need to find a low interest business loan, not sure that it even exists.. Then open the 2nd LLC to control the operating side/money intake side of business.
Yes
I have a question about the holding llc leasing the cars to the biz llc, does it have to be a legal lease and how much should i lease the cars for? Becuase i want the bulk of the cashflow to stay in the biz llc, correct?
Yes it has to be a written lease but you do not necessarily need the bulk of the income in the operating entity because the operating entity income is subject to self employment taxes.
Awesome content as always, Clint. But it does raise a couple of questions: We are looking at purchasing an RV with financing and renting it on platforms like RVezy when we are not using it. I assume this would apply just as it does for car sharing platforms like Turo. My questions is, once the Trust is created and the LLC assigned as the beneficiary, how does the income that the Trust produces by renting out the vehicle flow to the LLC and then to flow to us?
Have the rents paid to the LLC directly then take a distribution.
Is the LLC that owns the vehicles in this example considered a holding company?
Not how I use the term but you could in a sense.
The double entity only works if you own the car right? What about a fleet management llc. Would that take liability away from the holding company?
Yes and Yes
My insurance company does require commercial insurance. How would you go about leasing the vehicle? Is there is a contract or forms you should fill out between the two companies? Would the business leasing the car ever make income? Should you transfer money in its bank account or something?
I really do appreciate your response!
Yes, Yes, and Yes. You must treat this like you would any transaction with a 3rd party. If you wanted to lease a vehicle from Hertz what would Hertz require? Rental agreement (lease agreement) and compensation.
Great Video! Happy you did this video because I was thinking about going into Turo.
Do a lot of research. It’s actually a lot of work for the money. And sometimes the margins are slim
@@Eric_In_SF Not an easy semi-passive income as advertised, eh?
Hi Clint. Excellent video. Should Owner LLC be a sole proprietorship? I understand Business entity should be S or C corp…but what about owner? Thanks.
Yes that would work.
@@ClintCoons thanks. Much appreciated.
@@ClintCoons would it be better if its under holding corp instead of sole proprietor?
Do we need to create the two LLCs (1 normal - 1 s corp) if we just have one car?
Depends on your income. Maybe start with one entity until the income increases.
Can someone please explain 4:45 i totally understand if I out right own my vehicle I set up two LLC's. But how do I "lease" my owned vehicle to my second LLC which is my business?
Simple lease agreement
I'm glad I found your contents!
Gina Lolo
Thanks for watching.
What's the best way to get the vehicle (I own it outright) into my existing WY LLC? Could the PPT strategy be used to have more flexibility of acquiring personal insurance instead of more expensive commercial insurance? Thanks in advance.
Yes that could work
Hey Clint,
Now what if you purchased the vehicle by seller finance from an owner?
You should change the registered owner to your LLC.
What about using a c-corp?
Absolutely.
Sorry I am confused here. You are supposed to own the vehicle is what they say on their website.... you cant have a loan, lien or lease on the vehicle... "Have a valid registration and insurance policy in your name." Would you strategy still work in this case ?
In your name or the business name? The entity owning the vehicle will carry insurance and be listed as the registered owner.
If I have a paid off
Correct.
Should the LLC owning the vehicles be a holding company that also owns the operating LLC?
No you would want to keep the property separate from the business.
Clint- you're the man! Quick follow up- I live in Massachusetts where it costs $500 to start an LLC and $520/year every year thereafter to file my annual report. For the purpose of conversation- let's say I'm making $10K/yr off one car on Turo that I own outright. The vehicle is worth $25k, and would be the only business asset. Based on your system I'd set up two LLC's, costing me $1,040 a year, to protect a $25k asset. I'm not sure this is a good value proposition. Am I thinking about this correctly?
I would agree on the two LLC structure but consider using just one for your business so you have protection in the event of an accident.
In Colorado, it's only $10 per year for the Annual Report. Just curious where you live that it's $520.00. That is expensive.
Does transferring car to LLC have any effect on your Taxes? What about buying or selling a car under a LLC is there something to know? What about car insurance? How would you go about setting up a dual entity and leasing the car to the other business? Thanks for answering my questions in advance!
It has no effect on your taxes but it could impact your insurance. Best to contact your insurer and inquire.
@@ClintCoons My insurance company does require commercial insurance. How would you go about leasing the vehicle? Is there is contract or forms you should fill out between the two companies? Would the business leasing the car ever make income? Should you transfer money in its bank account or something?
I really do appreciate your response!
I am just starting out and have 1 car under my personal name. If it’s placed into an LLC, what type of insurance can you expect to get and would cover you while you drive it to get it cleaned, service etc when it is not rented on Turo? Will an insurance company cover 1 car in an LLC, have heard people say you need a fleet before getting coverage.
You will need a commercial policy. Also, if you have loan be sure to check if you can transfer title (registration) if you are not the legal owner.
@@ClintCoons Do we need to create the two LLCs (1 normal - 1 s corp) if we just have one car?
@@Myhands14 It depends on how much business you are generating. One LLC could be fine if you are just starting out.
thank you so much for this, i have one question please, i have 1 car under my S corp. no.1, how can i lease it to my S corp. no.2? i live Virginia, thanks again
You enter into a lease agreement between the two companies. Keep in mind you will need to register the car under company #2. Thus, company #1 is the legal owner but company #2 is the registered owner.
@@ClintCoonsHi! Quick question. I also live in Virginia, for those of us with cars < $10k, can we complete a lease agreement with our personal vehicles to our LLC?
When you lease Vehicle to LLC Business, how do you pay The LLC Vehicle owner? you send all the earnings ? Which LLC pay Tax then?
Yes and these earning pass through to you as the LLC owner.
My Turo business is anonymously set up. Will getting my seller’s permit/ wholesale license (so I can buy cars at auction) ruin that?
Not sure on that one.
I did my hard research just recently and for most areas it is not really profitable. What is happening is that there is so much competition - the smaller fleets and owners of one or two cars are lowering their price/day just to GET BY and pay their loan and other expenses. They do not care about profit at this time. So there is a price war to the downside. This in turn is causing the larger fleets to do the same... in fact, a lot of mid-large fleet owners are SELLING their fleet to bring in income and to get out of the business!!
According to the numbers of my local area - owners of 6 - 9 vehicles are only doing about $80 per month/vehicle @ average of 4 days rented ... to $118 / month / vehicle @ average of 6 days rented on the lower end. On the higher end; $509/month per vehicle @ avg of 4 days rented ... to $763/month per vehicle @ avg of 6 days rented.
Remember, those are GROSS figures not NET - you still need to include cost of maintenance, gas, cleaning, repairs, insurance, parking, etc., which is about 67.5% of GROSS.
Now, do the math...
I already have a holding S-corp where I bought the car. I am creating an LLC for the biz and to who I am going to lease it. Would that be the correct idea?
Yes
how was the process of buying the car under a s corp? i heard it is diffcult ? thanks
@@stephanienazario8481 Interesting. I have never encountered any issues with buying a vehicle in an entity.
it's a lot harder, business vehicle insurance and finance rates are SO much higher
Help I need to do this. I need more info on how! Please please
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Can this work if I have my cars registered in Montana Holding LLC, and a Wyoming/Delaware operating company?
You would make the MT LLC the legal owner and your business LLC will be the registered owner.
So
When u have two businesses, a leasing business and Turo business and a car in a trust and that trust is owned by the leasing business, rather than leasing the car to ur Turo business directly, can I lease the car to a separate trust that is owned by my Turo business? That way if I have 10+ car’s they don’t all show up registered under the business’s name publicly
Yes you can
I’m blown away! Thank you for the video, it was very informative 👍🏽
Glad you enjoyed it!
okay so what is the process to lease an owned vehicle from the vehicle LLC to your other business LLC paperwork wise
You would put together an auto lease agreement. Here is an example:
This Vehicle Lease Agreement (the “Agreement”) is made and entered into as of [date] by and between [Lessor Name] (the “Lessor”) and [Lessee Name] (the “Lessee”).
Vehicle. The Lessor agrees to lease to the Lessee the following described vehicle (the “Vehicle”): [make, model, year, VIN number, license plate number].
Term. The term of this lease shall begin on [start date] and shall terminate on [end date] (the “Term”).
Rent. The Lessee agrees to pay to the Lessor rent for the use of the Vehicle during the Term in the amount of [rent amount] per [month/week/day] (the “Rent”). The first payment of Rent shall be due on [due date] and subsequent payments shall be due on the [same/different] day of each [month/week/day] during the Term.
Security Deposit. The Lessee shall pay a security deposit in the amount of [security deposit amount] to the Lessor on or before the start of the Term. The security deposit shall be returned to the Lessee at the end of the Term, less any deductions for damage to the Vehicle or any other charges owed by the Lessee under this Agreement.
Use of Vehicle. The Lessee shall use the Vehicle only for lawful purposes and in a careful and prudent manner. The Lessee shall not use the Vehicle for any commercial purposes or to carry passengers for hire. The Lessee shall comply with all laws, rules, and regulations governing the use of motor vehicles.
Maintenance and Repairs. The Lessee shall be responsible for the maintenance and repairs of the Vehicle during the Term, including all costs associated with such maintenance and repairs. The Lessee shall keep the Vehicle in good condition and repair, ordinary wear and tear excepted.
Insurance. The Lessee shall maintain liability insurance covering the use of the Vehicle during the Term in the minimum amount required by law. The Lessee shall provide the Lessor with proof of insurance upon request.
Indemnification. The Lessee shall indemnify and hold the Lessor harmless from any and all claims, damages, or expenses arising out of the use of the Vehicle during the Term, including but not limited to claims for personal injury or property damage.
Termination. This Agreement may be terminated by either party upon [number of days] days’ written notice to the other party. Upon termination, the Lessee shall return the Vehicle to the Lessor in good condition, ordinary wear and tear excepted.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of [state], without regard to its conflict of laws provisions.
Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties, whether written or oral.
Amendments. This Agreement may be amended or modified only by a written instrument executed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
@@ClintCoons So the vehicle LLC would then be set up as an auto dealership? I am in process of following your steps and forming the vehicle LLC but when asked what type of business it is, I am assuming an auto dealership might be the answer since it will be used to lease vehicles to the business LLC? Btw I love your content and I look forward to catching up on all your videos for my future real estate endeavors
Hello Clint is a serious LLC worth it if the Turo company is leasing all vehicles from the leasing company and has very minimal assets
Not if you are leasing the car.
@@ClintCoons awesome so I guess that says me a lot of headache
I am the legal owner of the car, I open an llc to lease my vehicle to the llc which becomes the registered owner. I get sued and they get my llc bank account and my insurance, but could they take my vehicle since the llc is not the legal owner? Here’s where I am confused. If I open 2 llc’s like you suggested, one as the legal owner, the other to lease to to become the registered owner. If I get sued, they get my bank account, my insurance, but they can’t get the car from the other llc as the legal owner is what you are implying.
The LLC must be the legal owner. If your vehicle is financed then this strategy does not work for holding title to the vehicle.
How much do you lease the car to the operating LLC for?
You would need to come up with a fair market rent but keep in mind the rental is unique and could warrant a premium
Why do I chose to elect an s-corp or c-corp over sole proprietor?
An S-Corp will save you 15.4% in employment taxes on part of your income if properly structured. Sole proprietorships are the least efficient structure for businesses. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Would this turo strategy work with a serious LLC ? Because a lot of renters have many vehicles filing LLC fees for each vehicles every year is expensive very expensive
Yes
Should both LLC's be under the series LLC?
@@armobyzantine5881 One series LLC with separate cells.
Been following for a while. Love your info. Do you work with foreign Nationals or foreign grantor trusts?
We work with foreign nationals investing in the US.
If I have a loan out on the car am I able to transfer the registered owner and the loan would still be under my name? Or would I have to talk to the bank and transfer the loan as well?
Depends on your state. Check to see if you can transfer the registered owner.
@@ClintCoons Thanks!
For the dual LLC situation do I literally need to pay for and own two LLC’s? 1 that just holds car assets and 1 that conducts car sharing business on Turo?
If you are looking for the protection I described. Also this only works if you own the vehicle otherwise just use one entity.
@@ClintCoons awesome thanks so much 🙏
Thank you so 1 LLC per car ?
Not at all. 1 LLC for all of the cars.
Why is a C or S corp necessary for the LLC?
You do not want your income to be all taxed as active. The S-Corp allows you to divide your income between income subject to employment taxes and distributions that are not subject to this tax.
Do I file my LLC as a C or S corp ? what is the difference?
S pass any income through to its owners to be taxed at their tax rate and C is taxed as a flat 21% tax rate on its income. Choosing what to file would require an analysis of your over all plan.
Hello, thank you for this important information. Can I purchase a car through my e-commerce LLC, create a Rental car LLC then lease that car to the rental car LLC for Turo? How would I go about structuring this the right way if its possible?
Yes you can!
Would you recommend doing a DBA for the Turo for now?
When you register ur Turo car that is owned anonymously to the state, do u give the state ur personal address, or will that become public info?
Use a virtual business address.
Everything you give the state becomes public record.
What if you have an S-corp for a business that’s existing and you do a second business DBA but are under the same S-corp ?
Correct
@@ClintCoons correct what? That’s the right way to go? That’s what I was going to do. I already own an auto repair under an S-corp. was going to add a DBA for rentals with Turo
@@kylen.6742 Yes, you can do that if you want to keep it under the same business but for liability protection, you might consider setting up a disregarded LLC that is owned by your S-Corp and run the Turro out of the LLC.
@@ClintCoons perfect thank you. I’ll talk to my accountant/tax ppl
Cars
The
Best
Sell
do you even need liability insurance with such a structure?
Absolutely.
But the trust provides no liability protection. So do you lease the car out to an LLC and make a 2nd LLC as the beneficiary?
yes that would work.
Why not a corporation? What are the differences in llc and inc.
You could but an LLC has fewer formalities and it provides charging order protections for its member.
I'm debating whether or not I should make my WY holding company the trustee of my personal property trusts that I'll be putting my Turo cars in for my Turo business. If I have 10 cars and 10 trusts and everything points back to my WY LLC and they would be able to see all of those trusts, wouldn't they think I had deep pockets? If I used a lawyer to be my trustee and they had the same problem, wouldn't this make them want to come for me?
Good point. I would not use my holding co as the trustee. Possibly use a separate WY LLC as your trustee.
@@ClintCoons I have a FL LLC that is owned by my WY LLC holding company. Should I use that as the trustee? I’d rather not make a WY LLC just for this purpose. Would the FL LLC be my best option as trustee?
@@CianTv1 Yes that is probably the preferred move.
Is the idea of getting a lawyer to be the trustee of ur trust and then having them resign that the creditor would first try to contact the trustee BEFORE actually suing ur business? Because what if my creditor sees u as my trust’s trustee and then does an asset search on u and finds a million things and then thinks u’r the owner of my business and then decides that the business has deep pockets and decides to pursue a lawsuit for whatever reason?
Yes.
if u have your turo car in a personal property trust and have ur leasing business as the beneficiary of that personal property trust and that trust is the LEGAL owner of the car. Then u have the TURO BUSINESS LLC (a separate LLC), be the registered owner. Should u register the car through a trust if it's just the registration and NOT legal title? If someone was to want to sue u, if they only saw that the Turo business LLC only held registrations for cars and not legal title, wouldn't that discourage them from trying to sue cause that wouldn't count as actually owning assets?
Are the vehicles paid off?
@@ClintCoons yes. That’s why the leasing business would hold title and not the actual Turo business
These questions assume I will have more than one vehicle
What tax election should be made for the Vehicle LLC (if you own the vehicle?)
Does each of the entities need to be established in the same state where the car is located?
Do you reccomend that each vehicle owned by the Vehicle LLC be held in a cell of a Series LLC (Texas)?
Should the Vehicle LLC be a Wyoming LLC to maintain privacy of legal ownership?
Should the Biz LLC (Texas) be owned by a Wyoming LLC?
Can you register a vehicle in Texas if it is owned by a Wyoming LLC?
Is the lease income received by the Vehicle LLC considered passive or active income?
The LLC should be set up in the state where your are registering the vehicle. The Vehicle LLC will be disregarded to the Wyoming LLC that can be set up as a partnership or disregarded LLC. The income generated from the lease of your vehicle to your operating entity will be considered ordinary income or active income depending on whether you are considered to be in the business of leasing personal property..
@@ClintCoons Thank you very much. Follow up question, If both enties generate active income, would it make sense to have both entities, Texas in my case, Vehicle LLC and Biz LLC, set up as disregarded entities owned by the same Wyoming LLC that has a S-corp election? Thanks in advance
@@realjeffmcelroy Yes that would work.
But i thought Turo has insurance coverage so how could someone come after you, your LLC or S/C corp?
Attorney go after anything with a pulse. :)
Thanks Clint, this is great information that i needed. So if my cars still have am lean holder, ie my credit union, do I still need to apply the "LLC/S-CORP" Model? Cars owned by the LLC leased by the S-Corp?
@@michaelburke3701 It Probably will not work with the vehicle-owning entity but definitely use the S-Corp for the biz side.
@@ClintCoons So at a minimum I can have Turo or Uber/Lift, etc... deposit my earnings into the S-Corp and still get the Coporation Tax Break
@@michaelburke3701 yes
How would I Structure the business Insurance? Which of the entities would carry it ?
The registered owner with the legal owner as a loss payee or named insured depending on your carrier. You should also ask about a policy for the legal owner.
Great video! Question: if I do own the vehicle outright, why do I need the dual LLC structure? Can't I keep the *legal* ownership under my own name, and then set the *registered* owner as the business LLC? That way, I have the same asset protection benefits but with a simpler (single LLC) structure.
Is it because an LLC is required in order to *lease* the vehicle? Or is it because of something else? Thanks!
To answer my own question: I think it's because you also want to protect the assets from someone suing me personally (not the business LLC).
I guess it's less likely that someone will sue the ownership LLC since it just sits there and does nothing, so it's hard to claim it wronged you in some way.
Correct
@@bennyn36 If you get sued personally then the creditor can come after your personal assets. If you have an LLC you will have charging order protections to prevent a creditor from taking your LLC.
@@bennyn36 No only against your personal assets.
Do you need a lease agreement/legal document between the asset holding LLC and the operating LLC that's filing as an s-corp?
Yes you do.
My brother is worried about the legal implications of purchasing and registering a car in the name of a trust and having the trustee (a business) resign as trustee shortly after and not updating ur registration to the successor trustee with the state. If an accident happens with the car and the business has already resigned, could I get in trouble for doing this and misleading lawyers and what not?
The registered owner is liable which is the trust. A trustee is not liable unless it was negligent.
@@ClintCoons I’m specifically talking about not registering the successor trustee as the new trustee with the state so the public knows. Another lawyer said I could get a fine if I do that
@@CianTv1 Hmm. Trusts are not registered with the state so I do not know why he told you that.
@@ClintCoons for the car registration. My trust owns the car. Business 1 is listed as the trustee of the trust in the car registration with the state. He’s saying that if I resign and give the trustee position to the successor trustee and not tell the DMV, I’ll get a fine if they ever found out somehow (a lawsuit) because I’m supposed to update the trust info with the car registration.
I’m assuming ur line of thinking is that it’s much better to get a possible fine then to lose all of ur assets in ur business in a lawsuit. I think that’s valid and makes sense
He is genius
Question for you - we have an existing C Corp that we're looking to use some of it's capital for other investments. We're considering a Turo business. In that case the new LLC (or 2 of them) would go under the umbrella of the C Corp? Does that keep the C Corp free from liability?
Yes that would work. One to own the vehicle and the other to run the business.
If the business LLC has very minimum assets because it leases the truck then the business LLC would just pay the uninsured motorist fee which is $500 and save alot of money by not paying traditional insurance which is very expensive
That would most likely be a reason to blow through the LLC and pierce the veil.
Is it because the uninsured motorist fee is for regular drivers not for businesses or is it that I'm using the LLC to circumvent a mandate law?
@@ClintCoons how can I get into contact with your office for services thanks
@@armobyzantine5881 aba.link/clintss
Does the truck LLC need a business license , fed ein # etc etc or is the truck LLC fine by itself ?
Thank you soo much. this is very helpful. can you please make a video on Turo taxes? especially standard mileage deductions and limits
Question:
1. if you create the 2 LLCs, which of the LLC is used to file taxes and which LLC benefits the standard mileage deduction?
2. To be eligible for standard mileage deduction, IRS limits to 4 vehicles. Is this limit per individual or per couple filing jointly. Can a couple have 2 LLCs (1 per couple) with 8 vehicles total still use the standard mileage deduction in Turo business?
So forming 2 LLC's one for the car, one for the biz.
OR
A trust(with the car registered here) with an LLC within it
Is this a correct recap?
Yes.
What if I already have an established LLC with 5-6 vehicles registered under it already, also a turo profile with many reviews and An all star host status. How do I go about protecting that instead of starting over (turo, re-registering ) and transferring everything to the new LLC?
I'm just a nobody watching the content... but maybe you keep the LLC you have established on Turo, As the operating business. And change the ownership of the cars into the 2nd LLC. Then lease out those cars to the operating LLC. I'd ask someone with legal merit, but that's what I'm seeing from the info here.