The following is Reprinted from IRS Article: Effectively Connected Income (ECI)

Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States connected with the conduct of that trade or business is considered to be Effectively Connected Income (ECI). This applies whether or not there is any connection between the income, and the trade or business being carried on in the United States, during the tax year.

Generally, you must be engaged in a trade or business during the tax year to be able to treat income received in that year as ECI. You usually are considered to be engaged in a U.S. trade or business when you perform personal services in the United States. Whether you are engaged in a trade or business in the United States depends on the nature of your activities. Deductions are allowed against ECI, and it is taxed at the graduated rates or lesser rate under a tax treaty. The discussions that follow will help you determine whether you are engaged in a trade or business in the United States.

Certain kinds of Fixed, Determinable, Annual, or Periodical (FDAP) income are treated as ECI income because:

• Certain Internal Revenue Code Sections require the income to be treated as ECI,
• Certain Internal Revenue Code Sections allow elections to treat the income as ECI,
• Certain kinds of investment income are treated as ECI if they pass either of the two following tests:
  • The Asset-Use Test – The income must be associated with U.S. assets used in, or held for use in, the conduct of a U.S. trade or business.
  • Business Activities Test – The activities of that trade or business conducted in the United States are a material factor in the realization of the income.

In limited circumstances, some kinds of foreign source income may be treated as effectively connected with a trade or business in the United States. Refer to Publication 519, U.S. Tax Guide for Aliens.

The following categories of income are usually considered to be connected with a trade or business in the United States.

• You are considered to be engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant on an “F,” “J,” “M,” or “Q” visa. The taxable part of any U.S. source scholarship or fellowship grant received by a nonimmigrant in “F,” “J,” “M,” or “Q” status is treated as effectively connected with a trade or business in the United States.
• If you are a member of a partnership that at any time during the tax year is engaged in a trade or business in the United States, you are considered to be engaged in a trade or business in the United States.
• You usually are engaged in a U.S. trade or business when you perform personal services in the United States.
• If you own and operate a business in the United States selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the United States. For example, profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income.
• Gains and losses from the sale or exchange of U.S. real property interests (whether or not they are capital assets) are taxed as if you are engaged in a trade or business in the United States. You must treat the gain or loss as effectively connected with that trade or business.
• Income from the rental of real property may be treated as ECI if the taxpayer elects to do so.

Note: If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States.

Note: Certain kinds of income, which are normally treated as ECI or FDAP for income tax purposes, may not be treated as ECI or FDAP for withholding tax purposes.

Applicable Tax Rate

Income you receive during the tax year that is effectively connected with your trade or business in the United States is, after allowable deductions, taxed at the graduated rates that apply to U.S. citizens and resident aliens.

Tax Year

Generally, you can receive effectively connected income only if you are a nonresident alien engaged in a trade or business in the United States during the tax year. However, income you receive in another tax year from the sale or exchange of property, the performance of services, or any other transaction is treated as effectively connected in that year, if it would have been effectively connected in the year the transaction took place or you performed the services.

References/Related Topics

• Taxation of Nonresident Aliens
• Withholding Exemption on Effectively Connected Income

In general, a partnership (foreign or domestic) that has income effectively connected with a U.S. trade or business (or income treated as effectively connected) must pay a withholding tax on the effectively connected taxable income that is allocable to its foreign partners. In most cases, a partnership determines if a partner is a foreign partner and the partner’s tax classification based on the withholding certificate provided by the partner. The tax rate for such withholding varies depending on whether the foreign partner is a corporation, in which case the rate is the highest rate of tax specified in IRC Sec. 11(b). In case of foreign partners that are not corporations, the rate is the highest rate of tax specified in IRC Sec. 1. Note: Currently (2-16-2023), the withholding tax rate for effectively connected income allocable to non-corporate foreign partners is 37%, and 21% for corporate foreign partners.

See the full IRS article here:  Withholding Tax on Foreign Partners’ Share of Effectively Connected Income – IRC Section 1446

26 U.S. Code § 30D – Clean vehicle credit

(a) Allowance of credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each new clean vehicle placed in service by the taxpayer during the taxable year.

(b) Per vehicle dollar limitation

(1) In general
The amount determined under this subsection with respect to any new clean vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.

(2) Base amount
The amount determined under this paragraph is $2,500.

(3) Battery capacity
In the case of a vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $417, plus $417 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $5,000.

(c) Application with other credits

(1) Business credit treated as part of general business credit
So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).

(2) Personal credit
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.

(d) New clean vehicle
For purposes of this section—

(1) In general
The term “new clean vehicle” means a motor vehicle—

(A) the original use of which commences with the taxpayer,

(B) which is acquired for use or lease by the taxpayer and not for resale,

(C) which is made by a qualified manufacturer,

(D) which is treated as a motor vehicle for purposes of title II of the Clean Air Act,

(E) which has a gross vehicle weight rating of less than 14,000 pounds,

(F) which is propelled to a significant extent by an electric motor which draws electricity from a battery which—

(i) has a capacity of not less than 7 kilowatt hours, and

(ii) is capable of being recharged from an external source of electricity,

(G) the final assembly of which occurs within North America, and

(H) for which the person who sells any vehicle to the taxpayer furnishes a report to the taxpayer and to the Secretary, at such time and in such manner as the Secretary shall provide, containing—

(i) the name and taxpayer identification number of the taxpayer,

(ii) the vehicle identification number of the vehicle, unless, in accordance with any applicable rules promulgated by the Secretary of Transportation, the vehicle is not assigned such a number,

(iii) the battery capacity of the vehicle,

(iv) verification that original use of the vehicle commences with the taxpayer, and

(v) the maximum credit under this section allowable to the taxpayer with respect to the vehicle.

(2) Motor vehicle
The term “motor vehicle” means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.

(3) Qualified manufacturer
The term “qualified manufacturer” means any manufacturer (within the meaning of the regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.)) which enters into a written agreement with the Secretary under which such manufacturer agrees to make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) providing vehicle identification numbers and such other information related to each vehicle manufactured by such manufacturer as the Secretary may require.

(4) Battery capacity
The term “capacity” means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.

(5) Final assembly
For purposes of paragraph (1)(G), the term “final assembly” means the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle.

(6) New qualified fuel cell motor vehicle
For purposes of this section, the term “new clean vehicle” shall include any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) which meets the requirements under subparagraphs (G) and (H) of paragraph (1).

[(e)Repealed. Pub. L. 117–169, title I, § 13401(d), Aug. 16, 2022, 136 Stat. 1956]

(f) Special rules

(1) Basis reduction
For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (c)).

(2) No double benefit
The amount of any deduction or other credit allowable under this chapter for a vehicle for which a credit is allowable under subsection (a) shall be reduced by the amount of credit allowed under such subsection for such vehicle (determined without regard to subsection (c)).

(3) Property used by tax-exempt entity
In the case of a vehicle the use of which is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such vehicle to the person or entity using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such vehicle (determined without regard to subsection (c)). For purposes of subsection (c), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.

(4) Property used outside United States not qualified
No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1).

(5) Recapture
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.

(6) Election not to take credit
No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.

(7) Interaction with air quality and motor vehicle safety standards
A vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with—

(A) the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and

(B) the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code.

(8) One credit per vehicle
In the case of any vehicle, the credit described in subsection (a) shall only be allowed once with respect to such vehicle, as determined based upon the vehicle identification number of such vehicle.

(9) VIN requirement
No credit shall be allowed under this section with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.

(10) Limitation based on modified adjusted gross income

(A) In general
No credit shall be allowed under subsection (a) for any taxable year if—

(i) the lesser of—

(I) the modified adjusted gross income of the taxpayer for such taxable year, or

(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds

(ii) the threshold amount.

(B) Threshold amount
For purposes of subparagraph (A)(ii), the threshold amount shall be—

(i) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $300,000,

(ii) in the case of a head of household (as defined in section 2(b)), $225,000, and

(iii) in the case of a taxpayer not described in clause (i) or (ii), $150,000.

(C) Modified adjusted gross income
For purposes of this paragraph, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.

(11) Manufacturer’s suggested retail price limitation

(A) In general
No credit shall be allowed under subsection (a) for a vehicle with a manufacturer’s suggested retail price in excess of the applicable limitation.

(B) Applicable limitation
For purposes of subparagraph (A), the applicable limitation for each vehicle classification is as follows:

(i) Vans
In the case of a van, $80,000.

(ii) Sport utility vehicles
In the case of a sport utility vehicle, $80,000.

(iii) Pickup trucks
In the case of a pickup truck, $80,000.

(iv) Other
In the case of any other vehicle, $55,000.

(C) Regulations and guidance
For purposes of this paragraph, the Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles.

(g) Credit allowed for 2- and 3-wheeled plug-in electric vehicles

(1) In general
In the case of a qualified 2- or 3-wheeled plug-in electric vehicle—

(A) there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the applicable amount with respect to each such qualified 2- or 3-wheeled plug-in electric vehicle placed in service by the taxpayer during the taxable year, and

(B) the amount of the credit allowed under subparagraph (A) shall be treated as a credit allowed under subsection (a).

(2) Applicable amount
For purposes of paragraph (1), the applicable amount is an amount equal to the lesser of—

(A) 10 percent of the cost of the qualified 2- or 3-wheeled plug-in electric vehicle, or

(B) $2,500.

(3) Qualified 2- or 3-wheeled plug-in electric vehicle
The term “qualified 2- or 3-wheeled plug-in electric vehicle” means any vehicle which—

(A) has 2 or 3 wheels,

(B) meets the requirements of subparagraphs (A), (B), (C), (E), and (F) of subsection (d)(1) (determined by substituting “2.5 kilowatt hours” for “4 kilowatt hours” in subparagraph (F)(i)),

(C) is manufactured primarily for use on public streets, roads, and highways,

(D) is capable of achieving a speed of 45 miles per hour or greater, and

(E) is acquired—

(i) after December 31, 2011, and before January 1, 2014, or

(ii) in the case of a vehicle that has 2 wheels, after December 31, 2014, and before January 1, 2022.

(h) Termination
No credit shall be allowed under this section with respect to any vehicle placed in service after December 31, 2032.

(Added Pub. L. 110–343, div. B, title II, § 205(a), Oct. 3, 2008, 122 Stat. 3835; amended Pub. L. 111–5, div. B, title I, § 1141(a), Feb. 17, 2009, 123 Stat. 326; Pub. L. 111–148, title X, § 10909(b)(2)(H), (c), Mar. 23, 2010, 124 Stat. 1023; Pub. L. 111–312, title I, § 101(b)(1), Dec. 17, 2010, 124 Stat. 3298; Pub. L. 112–240, title I, § 104(c)(2)(I), title IV, § 403(a), (b), Jan. 2, 2013, 126 Stat. 2322, 2337, 2338; Pub. L. 113–295, div. A, title II, § 209(e), Dec. 19, 2014, 128 Stat. 4028; Pub. L. 114–113, div. Q, title I, § 183(a), Dec. 18, 2015, 129 Stat. 3072; Pub. L. 115–123, div. D, title I, § 40405(a), Feb. 9, 2018, 132 Stat. 148; Pub. L. 116–94, div. Q, title I, § 126(a), Dec. 20, 2019, 133 Stat. 3231; Pub. L. 116–260, div. EE, title I, § 144(a), Dec. 27, 2020, 134 Stat. 3054; Pub. L. 117–169, title I, § 13401(a)–(i)(1), Aug. 16, 2022, 136 Stat. 1954–1961.)

Note:  This is a republication of an Internal Revenue Code Section.  Please consult your tax advisor for Interpretation and guidance, and for any Treasury Regulations or IRS Rulings that may also apply.

View or Download:  https://www.irs.gov/pub/irs-pdf/f8936.pdf  IRS Form 8936 (Revised January 2023) – Qualified Plug-in Electric Drive Motor Vehicle Credit

Note:  As of the date of this Article (1/31/2023), only the 2022 Instructions to Form 8936 are available from the IRS website. View or download: https://www.irs.gov/pub/irs-pdf/i8936.pdf

 

 

 

Acquisition Planning for a Tax Basis Step-Up  Author: Steven D. Shapiro, Published in the Florida Bar Journal, Vol. 91, No. 1, January 2017, Pg. 32

Includes discussions of IRC Section 338(h)(10) elections and IRC Section 336(e) elections

See:  Disastrous Tax Consequences To Avoid When Liquidating An S-Corporation   Author: David Fall, published in the Florida Bar Journal, Vol. 91, No. 9,   November 2017,   Pg. 44

See: Tax Planning for S Corporations: Mergers and Acquisitions Involving S Corporations (Part 1) (PDF) Published by Jerald David August and Stephen R. Looney. Jerald David August is a Partner in the law firm of Kostelanetz & Fink, LLP, New York, New York and Stephen R. Looney is a shareholder in the law firm of Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A., Orlando, Florida.

 

See:  Redemptions and Purchases of S Corporation Stock (PDF) Published by STEPHEN R. LOONEY and RONALD A. LEVITT. Stephen R. Looney is a Shareholder, Dean, Mead, Egerton, Bloodworth, Capouario
& Bozarth, P.A., Orlando, FL, and Ronald A. Levitt is a Shareholder, Sirote & Permutt, P.C., Birmingham, AL

A married couple, residents of Florida, form¹ a Florida limited liability company (“LLC”) and they own their membership interest in the LLC as tenants by the entireties with right of survivorship, a special joint tenancy between spouses that provides some added asset protection in Florida (explained below).  The LLC will acquire or hold title to the Florida real property to be rented (either residential or commercial real property for rent).  If the property is owned by the couple before forming the LLC, then they can deed the property to the LLC (please consult your attorney in this regard). If the property is subject to a mortgage, there may be some substantial transfer tax (doc stamps) to pay on this transfer based at a minimum on the value of the principal balance of the mortgage note outstanding.  In such case, and the mortgage financing contains a “Due On Sale Clause” which might allow the lender to call the entire loan as immediately due and payable, then the couple must also notify the lender and obtain the lender’s written permission to make the proposed property transfer from the couple to the LLC. Written consent to this transfer is needed to prevent triggering any “Due On Sale Clause” contained in the mortgage, note or financing documents.  If the property is not subject to any mortgage or equity line, then a transfer by deed to the LLC should be just fine. The couple should probably use a general warranty deed or special warranty deed when transferring the property to the LLC, which might help to keep the previous title insurance policy liable for any prior defects in title to the property. (The title company would likely remain obligated under the title policy if this is the first transfer after the purchase of the property at which time title insurance was acquired by the couple to insure good title of their purchased realty).  In theory, the LLC would assert liability for breach of warranty of good title against its members and/or bring suit against its members (who warranted title with their warranty deed given to the LLC), and the members would promptly notify their title insurance company that there is a problem with the title and that the title insurance company needs to defend and make good on its obligation of insurance.

Having the LLC own the rental property adds a layer of liability protection for the LLC Members (owners).  The real estate and any other assets invested in and owned by the LLC would still be placed at risk attributable to any liability of the LLC let’s say to the tenant or its invitees, or for example, a slip and fall by a guest or customer on the leased property that is not adequately insured by the LLC or by the tenant in accordance with the lease, or the LLC is not adequately indemnified by tenant under the terms of the Lease.  However, the LLC Members have “some” level of personal protection from liability if, for example, they maintain all the requisite formalities of the LLC, and they don’t comingle or pay personal expenses with LLC funds, and they ensure that the LLC pays the rental activity expenses from LLC bank accounts, etc., etc., a topic well beyond the scope of this article.

If the married couple owns its membership interest as tenants by the entirety, then the LLC membership interest (owned by the married couple) as well as the underlying assets owned and held by the LLC, have some added level of liability protection .  A judgement creditor of either spouse should not be able to attach the membership interest unless the creditor’s judgement is obtained against both spouses.

Additionally, if a court would determine that the LLC is a multi-member LLC (rather than single member) and/or that the ownership by the entireties is somehow defective, then the creditor might only be entitled to obtain a statutory-based “charging order” against the membership interest of the one spouse who is the debtor; and, in such case, the creditor availing itself of the charging order should only have an economic interest in that one debtor’s transferrable interest, but not any rights of a member, and no right to reach the underlying LLC assets in order to satisfy the creditor’s judgement.  It would still seem better to rely on upholding the protection afforded with ownership of a single membership interest as tenancy by the entireties.

In Rev Proc. 2002-69 the IRS stated that an entity owned solely by a married couple as community property, under applicable local law, can be treated as disregarded for federal tax purposes. Florida is not a community property state, and the IRS has not specifically addressed the issue as to whether a membership interest owned by a married couple as tenants by the entireties can also be treated as a single member LLC that is an entity disregarded apart from its member for federal tax purposes. Under the laws of States that recognize community property, assets are deemed to be owned equally by the husband and wife and neither spouse has a full interest in the assets.  Similarly under Florida common law regarding tenancy by the entirety each spouse is deemed to have an equal and undivided interest in the property.  Some commentators argue that a membership interest by a married couple as tenants by the entirety should be treated as a single member.

Interestingly, an apparent purpose for an LLC that operates a business (and thus not solely producing rental receipts) to be treated as a partnership for federal tax purposes is so that each spouse will receive a partnership schedule K-1 having an equal share of earned income subject to reporting and paying self employment tax on schedule SE Form 1040 (so each spouse can build up social security benefits for retirement). However, an LLC that strictly has only rental revenues does not generate earned income for which either spouse must report and pay any self employment tax.

For the following discussion, please assume that the Members and/or the LLC are merely investors in the real property acquired and held for Rental, and they are (a) NOT real estate professionals or (b) NOT persons who each materially participate more than 750 hours a year in the real estate ‘business.’

See: 26 CFR § 301.7701-3 – Classification of certain business entities. (U.S. Treasury Regulations – Printed / provided online / at law.cornell.edu – by Legal Information Institute [LII]).  For our purposes, in general, this pertains to classification of entities, such as limited liability companies, for federal tax purposes.

The LLC will either be treated as a partnership or as a disregarded entity for federal income tax purposes (under the default classifications absent elections), unless the Members timely file IRS form 8832 (entity classification election) to elect to be treated as an association taxable as a “C-corporation” for federal income tax purposes, or unless the Members timely file IRS form 2553 electing to be an “S-Corporation” for federal income tax purposes. Neither of these two elections is deemed advisable because:  (1) a C corporation and its shareholders could be double taxed, once on the corporation’s and secondly on any non-deductible dividends paid to the members / shareholders. (2) the real estate and assets of the C Corp or S Corp are not  part of a taxable transaction when they are deemed to be contributed to the corporate entity.  However, these assets may be subject to tax on their appreciation in value or on recapture of depreciation if the C Corp or S Corp is liquidated and the assets are distributed in kind to the member / shareholders. (3) If the Members are treated as 1 Member (owing a single membership interest as tenants by the entirety), then the LLC is treated as an entity disregarded apart from its member and the LLC’s net rental income is reported on Schedule E of the annual Form 1040 joint federal individual income tax return of the couple, without the need for filing a partnership return for the LLC.  (4) If the LLC is considered to be a multimember LLC, and thus is treated as a partnership for federal income tax purposes, then the LLC will file an IRS Form 1065 Partnership Return, and attach IRS Form 8825 to report the rental income and deductible rental expenses.   Net rental income from Form 8825 is reported on Line 2 of Schedule K of the Form 1065 partnership return.

Most importantly, the LLC and its Members should enter into a well-drafted written operating agreement and a take all steps to ensure that the married Members will be deemed to own their LLC membership interest as Tenants by the Entirety.  To these ends, Tenants by the Entirety ownership in Florida requires these six “Unities” which should be established.  These six unities must exist for the asset (that is, the membership interest) to be treated as owned by Tenants by the Entireties:

1. Unity of Possession (joint ownership and control);
2. Unity of Interest (the interests in the membership or account must be identical);
3. Unity of Title (the interests must have originated in the same instrument, such as issuing a single membership certificate and establishing the membership interest of couple via the LLC operating agreement);
4. Unity of Time (the interests must have commenced simultaneously,  via the operating agreement and simultaneous issuance of the single membership certificate);
5. Survivorship; and
6. Unity of Marriage (parties must be married at the time the property became titled in their joint names).

If one of these six unities is not present, then Tenants by the Entireties ownership would likely fail and the asset (i.e. the membership interest) could be subject to a spouse’s creditors.  However, keep in mind the ‘charging order.’  See Florida Statutes, Section 605.0503 – Charging Order.

Let’s look at the unity of Joint Ownership and Joint Control.  Should the LLC be a member-managed LLC or a manager-managed LLC?  If there are no other members, the married couple should have equal management / voting rights attributable to their membership interest in a “member-managed” LLC, regardless of whether they are treated as a single member (casting one vote together) or as two members (each having one vote).  The single vote by consensus of the tenants by entireties in a “member-managed” company would seem to display better evidence of having a single member LLC (disregarded entity) without the need to file a separate Form 1065 partnership tax return each year. If the couple insists on having a manager-managed LLC (for example,  to avoid listing the Members on pubic record at www.sunbiz.org), the articles of organization or operating agreement should provided for exactly two managers, and each spouse should be named as an initial “manager” in the articles of organization and in each annual report thereafter.  Thus, having a manager-managed company would seem to provide identical “control” rights, with each having a single vote.  Neither can proceed with a certain action unless they both affirmatively vote to approve it.  Although, again, having the member-managed LLC would likely be better to bolster the “unity of control,” and better ensure the benefits of some asset protection of the membership interest and underlying assets via ownership as tenants by the entirety.

See: What is Tenants by the Entireties in Florida? Posted April 13, 2021 by Bishop L. Toups, of Daily Montfort and Toups.

See: Owning Rentals in an S Corporation Might Be a Costly Mistake. Posted November 2020, by Amanda Han.

See: A Practitioner’s Guide to Limited Liability Companies.  January 6, 2016, By Domenick R. Lioce, Esquire — Florida Institute of Certified Public Accountants (FICPA).

¹  Formation involves preparing an LLC operating agreement and then submitting articles of organization to the Florida Department of State for filing of record.

Disclaimer:

Yes, I am an attorney, but I do not become your attorney until you hire me by signing a written agreement containing the terms of representation.  This article does not create an attorney-client relationship.  This article should not be seen as providing legal advice. You should consult with an attorney before you rely on this information.

You may not be required to open a formal administration or summary administration in Florida for certain smaller estates in order to transfer personal property.

The website of the Clerk of the Circuit Court of Lee County, Florida has posted a few PDF files containing sets of forms, instructions and samples that you can view and download.

Forms Library found on the website of the Lee County Clerk of the Circuit Court. Following is the link to the Lee County website page containing this forms library.  Please scroll down through the Lee County forms library on the following web page and look for the applicable forms under the heading “Probate” forms.

https://www.leeclerk.org/courts/forms-library

Following are some of the Lee County forms, instructions and samples (as of 08-24-2020) downloaded from the Lee County Clerk of Court website Forms Library:

Instruction Sheet Disposition of Personal Property Without Administration(PDF)

Sample and Petition for Disposition Without Administration (PDF)

Consent to Proposed Disposition of Personal Property Without Administration(PDF)

I did not find an eligibility chart on the Lee County Clerk’s website.  However, the disposition forms provided on the website of the Pinellas County Clerk of the Circuit Court contains an eligibility chart that lists the various reasons and dollar value limits for disposition of personal property without administration.  Following is the Pinellas County eligibility chart, although the above Lee County forms and samples might need to be modified in order to claim disposition without administration for a different applicable eligibility reason.

If you cannot or do not wish to do this on your own, you may contact our firm or another Florida attorney for assistance with the procedure described in the Lee County forms.

Disclaimer:

Yes, I am an attorney, but I do not become your attorney until you hire me by signing a written agreement containing the terms of representation.  This article does not create an attorney-client relationship.  This article contains County forms with legal information and should not be seen as legal advice. You should consult with an attorney before you rely on this information.

You may not be require to open a formal administration or summary administration for certain smaller estates in order to transfer personal property.

The website of the Clerk of the Circuit Court and Comptroller of Pinellas County, FL has posted a PDF file containing a set of fillable forms (12 Pages) that you can view and download.  The forms are listed alphabetically at this web page link->  MyPinellasClerk.org  On that webpage, scroll down and look under the category or “Estate” or “Probate.” You may also download that same PDF Fillable Forms here on our website at the following link.

Disposition of Personal Property Without Administration Sixth Judicial Circuit in and for Pinellas County, Florida.

If this process is not sufficient for your circumstances, please call us to see if we can help.

Here is their disposition eligibility chart:

Below is a similar downloadable form-set rules and explanation for Brevard County, Florida:

Disposition of Personal Property Without Administration Form set, Brevard County, FL