Well folks I heard a new one from my Nephew, seems like he attended a seminar on financial investments this week end. He was told to set up either an LLC, S-Corp or the (preferred entity) a Nevada Escrow to operate his business thru. When he asked me about the Nevada Escrow I said what I never heard of it. Question have any of you folks heard or delt with the Tax Entity Nevada Escrow. He is thinking of investing with a gentleman who developments housing developments. Nephew's job would be to raise the needed funds to fund the developments and share in the profits.
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Nevada Escrow
I never heard of such an entity and a Google Search turned up only escrow companies located in Nevada. I have a feeling that someone is trying to scam your Nephew but I think he should seek the advice of a tax lawyer. -
Nevada Escrow?
That is not an entity recognized by the IRS. Sounds like a scam job.
Neither is an LLC. There is no LLC tax return. Clients set up an LLC and think there is a tax return for LLC's.
Only 1040, 1065, 1120, 1120S, 1041, 990.
When I question as to how they elected to be taxed, I get the deer-in-the-headlights look.
Only after reading the LLC papers do you get an idea on how they are to be taxed. Maybe. Depends on the competency of the person drawing up the papers.Jiggers, EAComment
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every other state
>>the Tax Entity Nevada Escrow<<
This is not a tax entity. IRS would tax it according to the way it operated, presumably as a partnership or corporation if it is operating a business. If he is "raising funds" an escrow account might be an appropriate place to hold the money until the business opportunity is developed, perhaps pending SEC or other regulatory approval. Nevada is more tolerant of creative business structures, but of course he must also comply with the laws of every other state in which his company operates.Comment
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Well Josh,
If I thought that someone was trying to con me I might simply stop talking to the individual and go to the police. If I were less certain of the con, I would bring my tax lawyer into the conversation. Tax knowledge would be important o that he could tell me if the entity exists and legal knowledge would be important so he could tell me if the proposal involved illegal activities. I suppose that a very high powered EA with an accounting degree (which I am not) AND a garden variety business lawyer would do equally as well as one tax lawyer but I don't think the person who went that route would be saving any money.Comment
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Not T/P, it's TP
Your nephew no doubt misunderstood the reference to S. Crow, otherwise known as Sheryl Crow, the 'If It Makes You Happy' singer, who spent two weeks touring the US on a Stop Global Warming College Tour.
Sheryl writes on her tour blog, "I propose a limitation to be put on how many squares of toilet paper can be used in any one sitting. I think we are industrious enough people to make it work with only one square per restroom visit, except, of course, on those pesky occasions where two to three could be required."
The presenter no doubt was suggesting that the written materials being peddled at the seminar should be recycled.Comment
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This could be a "real estate investment trust" tax entity that files form 1120-REIT. There are a lot of forms and entities not covered by a quick reference handbook. There is also a "regulated investment company (mutual fund) that files form 1120-RIC, a "designated settlement fund" that files form 1120-DF, an "insurance company" that files form 1120L or 1120-PC.
Your Nephew may know something you don't. Always ask for more facts before drawing a conclusion.Comment
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give it a try
>>Always ask for more facts before drawing a conclusion.<<
Interesting concept, Old Jack. I just might give it a try some day!Comment
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Have him invest in a California Escow. Just send me $50,000 as his initial investment, I as he raises additional funds, he will get a percentage of them. I'll do all the paperwork.Dave, EAComment
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