The exact ins and outs of forming a corp.?

Machine guns, SBRs, SBSs, suppressors, destructive devices, AOW (any other weapon)
Bob
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Post by Bob » Mon Dec 12, 2005 6:01 pm

To answer your question, a trust is a state entity, just like a corp. Both are established under the law of a particular state. If you were to move, so long as the trust meets the minimum requirements of the law in the new state to be a valid trust, then there should be no problem. However, you may have to amend the trust to domesticate it (make it legal under the state law) to your new state of residence. Best to have an attorney in the new state review a copy prior to the move. Not a big deal to change a trust, since the trust is amendable and revocable. As always, the toys must be legal to own in the new state, regardless to the type of legal entity you are using (i.e. trust, corp. etc.)

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Frankford-Arsenal
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Post by Frankford-Arsenal » Sat Dec 09, 2006 9:43 am

I disolved Frankford-Arsenal Corp & formed Frankford-Arsenal LLC.
The advantages are huge for me, no annual tax return for the State, I declare profits when I want & declare the Corp. assets . So there dosent have to be a deprecation schedule, etc...to be filed each year.
All this alone can add up to $1000.00's saved over time .
The LLC structure was not a easy option for a small business when I first started into the NFA world. The Dept. of State changed all that.
Now, Its the best way to go, if you want to use the LLC for additional uses, like real estate & vechicle aqusition, renting machineguns, etc, you can without all the additional accounting. It really is a excellent low cost Biz structure AND shelter .
My .02 cents
There are gun people, and then, there are people with guns.

robino

Post by robino » Sun Dec 10, 2006 11:47 am

Bob,
I'd like to get with you on this Trust thing.
I'm ready to go if you're still around.

loandr.
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Post by loandr. » Sun Dec 24, 2006 8:47 am

Frankford-Arsenal wrote:I disolved Frankford-Arsenal Corp & formed Frankford-Arsenal LLC.
The advantages are huge for me, no annual tax return for the State, I declare profits when I want & declare the Corp. assets . So there dosent have to be a deprecation schedule, etc...to be filed each year.
All this alone can add up to $1000.00's saved over time .
The LLC structure was not a easy option for a small business when I first started into the NFA world. The Dept. of State changed all that.
Now, Its the best way to go, if you want to use the LLC for additional uses, like real estate & vechicle aqusition, renting machineguns, etc, you can without all the additional accounting. It really is a excellent low cost Biz structure AND shelter .
My .02 cents
Did the same and have never looked back, FOR I they ideal way to go.

LD

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sigma_pete
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Re:

Post by sigma_pete » Sun May 11, 2008 9:08 am

Lincoln's Wax wrote:So, with S-Corp status, all the tax duty falls back on me, I don't need to file as the company? And if the business just spends money with no income, would the loss then show as losses claimable on my tax return? So, would it just be like a seperate schedule form that would just alter my adjusted gross income?
...
tony k wrote:Yes, the corporation still needs to file both state and federal tax returns of its own each year. They are filled with zeroes for an NFA investment S corp, and no taxes are due, but AFAIK (and my accountant agrees), you still must file them.

The IRS disallows what it calls "hobby" corporations, which never show an income and are used solely to deduct hobby expenses from your personal income tax liability. Unless you want to tangle with the IRS, DO NOT attempt to also use your NFA corp's expenses as a tax deduction. Just be happy it allows you to own NFA, and leave it at that.

Of course, if/when the corporation ever sells any of its assets, the corp's costs can be used to offset capital gains tax on the profits you make from selling the NFA items.
I'm not an attorney, accountant, tax advisor or anything of the such but it seems logical to me that the corporation can't "lose" money in and of itself by buying the suppressor. You (as an individual) provided the funds to purchase it, so that's income to the corporation. There's other issues that could lead to deductions such as deducting a portion of your property taxes, utilities, maintenance, etc. for the corporation "home office" but I believe that's where the IRS gets bent out of shape because you are then creating deductions with no intention of turning a profit (and therefore paying taxes on it). I'd love to hear a qualified professional's perspective on these issues.
Sigma_Pete
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ss1
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Re: Re:

Post by ss1 » Thu May 22, 2008 4:44 pm

sigma_pete wrote: I'm not an attorney, accountant, tax advisor or anything of the such but it seems logical to me that the corporation can't "lose" money in and of itself by buying the suppressor. You (as an individual) provided the funds to purchase it, so that's income to the corporation. There's other issues that could lead to deductions such as deducting a portion of your property taxes, utilities, maintenance, etc. for the corporation "home office" but I believe that's where the IRS gets bent out of shape because you are then creating deductions with no intention of turning a profit (and therefore paying taxes on it). I'd love to hear a qualified professional's perspective on these issues.
When you form the corporation and provide the funding for the purchase of the NFA assets, the company is not making a sale to you. It is not considered revenue, rather, you are capitalizing the company with enough cash (an asset) to purchase the NFA item (another asset). The offsetting balance sheet transaction can either be in the form of a loan to the company from you or a capital contribution to the company. In all likelihood, it would be the later to avoid the inherent lack of income the entity will have and not be able to pay a shareholder debt which can cascade into some eyebrow raising accounting in the eyes of the IRS. If the corporation ever sold the NFA item, it would qualify as a gain or loss of sale of asset rather than a revenue generating sale. I'm not an accountant, but I analyze their stuff all the time.

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MallNinja
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Re:

Post by MallNinja » Wed Aug 20, 2008 1:50 pm

rob_s wrote:Can an LLC also be an S-corp?

Very, Very late, but an LLC CAN be used to aquire NFA. All my NFA I currently own (9 items) have all be transfered to my LLC. The LLC is also a lot eaiser to maintain than an 'C' or 'S' Corp.
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