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Vermontess t1_j8prany wrote

Reply to comment by Interesting-Field-45 in How Vermont’s Housing Crisis Got So Bad by punkthesystem

Almost all landlords own houses under an llc. Are you saying there shouldn’t be any long term rentals in Vermont? Can you elaborate? I don’t understand

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Interesting-Field-45 t1_j8rf36t wrote

I’m saying all landlords should be personally tied to and liable for their properties.

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Vermontess t1_j8rf9l3 wrote

Like they should have to be owner managed? No property managers or that kind of thing?

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Interesting-Field-45 t1_j8rg0ll wrote

They can have property managers, that has nothing to do with it. An LLC gives them zero liability or personal responsibility over any damages and any financial fall out. It also allows them to launder money via the property owned. The US is the largest money laundering hub in world and property is a great way for people to do it. If people couldn’t own property through their LLCs, they wouldn’t be able to utilize it as a means to launder money, exit money, or use it as a means to avoid paying taxes.

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Vermontess t1_j8rks3n wrote

An LLC does not obsolve landlords of liability- they are still on the hook for damages and can be forced to sell the rental to pay damages to a renter. Most mom and pop landlords in VT use LLC’s so they don’t lose everything if someone slips and falls on some ice at their rental house and insurance doesn’t cover the damages. They would just lose their entire business, but in theory it protects the house they live in and other separate assets. The same way it is with a restaurant owner or grocery store owner or any other LLC business.

How can someone use an LLC as a means to avoid paying taxes? I understand there are bad actors at all levels, but what about an LLC specifically makes someone more likely to commit tax evasion?

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Interesting-Field-45 t1_j8rorb3 wrote

They should lose their “business” and be liable. We would have a lot less landlords and a lot more housed people. Houses would not be insanely out of reach if actual human beings could own them. Mom and Pop landlords? Lol. Most ridiculous thing I have ever heard. LLCs don’t have to be attached to them personally, you can have a Montana LLC that has no name attached. A trust can own an LLC. There’s a reason people LLC in Delaware so often. Billionaires use LLCs to avoid taxes and launder money literally everyday. The tax codes are so intricate and so confusing, you have to be an expert to truly understand how they move their money around to legally evade taxes. People from countries like China exit their money via properties and goods.

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Vermontess t1_j8rr13b wrote

They do lose their business. They are liable to lose their entire LLC and everything owned by it.

Over 70% of rentals in Vermont are owned by small or medium landlords and are usually held in LLC’s. The tax benefits of being a landlord are not anywhere near as advantageous as I had assumed before I read more about it for a family member

Personally, I think you're conflating LLC behavior with that more typical of corporate REI’s but I’m entirely sympathetic your EAT THE RICH vibes

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