Real Estate WEALTH Magazine Real Estate WEALTH Magazine - DOWNLOAD IT HERE! - Page 107

T he current political climate and economic uncertainty has, in a way, benefited the small- and medium- sized business owner. Proposed changes to the tax code, cutting taxes for some and increasing it for others have entrepreneurs looking closer at the way their business is set up. This self-in- quiry, this reflection, is the first step in finding the answers to build your business on a solid foundation. Fortune DNA, a boutique Las Vegas, Nevada structuring com- pany, focuses on custom-build- ing corporate entities for their clients depending on their clients’ specific needs. Many entrepre- neurs, even experienced ones, are unsure, which type of entity best allows them to achieve their short-term and long-term goals. Corporations address certain issues differently than partner- ships, and although an LLC is a modern amalgamation of the two, an LLC has its own unique set of benefits and detriments. Fortune DNA can assist you in navigating the myriad of choices, helping you choose a corporate entity that best fits your business and financial goals. A well-built and well-run entity separates an individual with a hobby, from an entrepreneur with a business. In the eyes of the IRS and the courts, a sole proprietor and a structured busi- ness are treated vastly different in taxation, and in assessing and separating business and personal liabilities. Corporations a few more webpages and prints himself a gross of business cards with his name proudly preceding his freshly minted title, “President and CEO”. The second type of hobbyist recognizes the inherent pitfalls of purchasing pre-made forms online and instead, calls one of the many structuring firms offering to fill out and file your documents for a fee. This second-tier service provides the hobbyist with a bit more information while upselling him on products that cost a lot, but offer little in return. With false confidence and minimal information, the hobbyist operates his businesses blissfully unaware of the rules of corporate governance. Comingling business and personal funds, signing documents in his personal capacity, failing to hold and record annual meetings are a few grievous mistakes that makes it eas- ier to “pierce the corporate veil” and bring crashing down the protective wall separating the business and personal assets and liabilities. In comparison, the real estate entrepreneur not only understands the importance of having a cus- tom-tailored structure but seeks to educate himself on the proper way to operate the structure to achieve maximum benefits. The real estate entrepreneur understands that a properly operated entity protects your business operations and assets from your personal liabilities and vice-versa. Being the defendant in a civil lawsuit is the wrong time to consider whether you should form a corporate entity to protect your assets. For- tune DNA focuses on action rather than reaction; building corporate en- tities to prevent future calamities. > are entitled to tax deductions that are not available to the sole propri- etor. Also, an individual may carry losses forward for three years, while a corporation can carry forward its losses for an incredible 20 years. As for Nevada’s corporate tax, there is none. As for liability, a Nevada en- tity with properly drafted By-laws or an Operating Agreement protects its Officer and Directors, or Managers from personal liability for lawful acts of the entity. A business market niche that epitomizes the difference between a hobbyist and an entrepreneur is real estate investments. The hobbyist may have set up what they believe is a corporate structure, going online and purchasing pre-packaged, dis- count services that promise much, but deliver little. With the click of the mouse, the hobbyist believes that he is now of- ficially a business. Flushed with ex- citement at starting his own “compa- ny” and patting himself on the back for making the executive decision to save a few bucks, the hobbyist visits Fortune DNA, a boutique Las Vegas, Nevada structuring company, focuses on custom-building corporate entities for their clients depending on their specific needs. PAGE 107 • 2017