REFLECTOR: LLC

Velocity Aircraft Owners and Builders list reflector at tvbf.org
Tue Jun 24 16:16:59 CDT 2014


Ron,

I'm also not a lawyer, but I have some experience with LLCs, including setting them up for aircraft. Here are some points to consider:

1. A previous poster was right that an LLC provides very little protection for you. Almost none if you're the builder. In the event of an incident, the plaintiff's attorney will go after the aircraft's owner (the LLC), the LLC's manager (probably you), the pilot (probably you), the aircraft's builder (probably you), the person responsible for maintenance (probably you), and the mechanic (probably you).

2. If the LLC is owned by just one person, the IRS allows you to deal with any tax issues on your personal tax return as if you owned the airplane directly. (They call the LLC a "disregarded entity" in this case.)

3. If the LLC is owned by 2 or more people (even if they're married) then it has to file its own tax return if there is any revenue generated. You can usually avoid having any revenue, but you do have to be aware of the restriction. For example, if your mechanic replaces a pump and the old pump's core is worth something, ask him to take the core and give you a deduction from your bill instead of buying the core and writing you a check for it.

4. An LLC provides some anonymity, if you want it. You can put the plane's registration in the LLC name and designate an agent's address so that your name doesn't show up on the FAA lists as the aircraft's owner. (We'll know who you are, but the telemarketers, junk mailers, and Flight Aware lurkers will have a harder time finding you.)

Hope this helps!

Reiff Lorenz, Dayton, OH
Velocity XL-RG, 59% complete
Currently working on: Fresh air vents.





-----Original Message-----
From: Reflector [mailto:reflector-bounces at tvbf.org] On Behalf Of Velocity Aircraft Owners and Builders list
Sent: Tuesday, June 24, 2014 12:27 PM
To: Velocity Aircraft Owners and Builders list
Subject: REFLECTOR: LLC

I know there are a couple of lawyers on the reflector so I thought I would ask.
Since getting insurance is nearly impossible I was told to put my plane in a LLC to help to remove me from to much liability . There is a small expense in setting it up and maintaining it but is it worth it.

Ron
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