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Owning and Leasing Real Estate

realestateStep One

Create legal entity online at Colorado Secretary of State, such as limited liability company or partnership ($50 filing fee; $125 if paper filing). Note a�� filing is public record. Link: www.sos.state.co.us/biz/FileDoc.do

Step Two

Obtain 9-digit EIN online from Internal Revenue Service (no filing fee). Note a�� print and save EIN confirmation letter. Link: www.irs.gov/businesses/small/article/0,,id=102767,00.html

Step Three

Open business bank account.

Step Four

If multi-owner that is non-husband and wife, then hire attorney or download from www.legalzoom.com or www.bizfilings.com Operating Agreement (limited liability company).

Note a�� No need for State ID#s and quit claim property with county if owned originally as individual, joint tenants or tenancy in common.

If limited liability company, default tax structure for multi-owner is Partnership (Form 1065); married couple may elect to report activity on separate Schedule E columns (Form 1040). Single owner reports activity on Schedule E (Form 1040).

If form of partnership (general partnership, limited partnership, limited liability partnership or limited liability limited partnership), default tax structure is Partnership (Form 1065).

Caveat – Please contact your legal, business and tax advisors to determine appropriate compliance with federal, state and local law and related filing requirements for your particular business.

Disclaimer – Advice, instruction and forms provided above are for illustrative purposes only and are offered as a public service without representation or warranty and is not intended or written to be used, and cannot be used, for the purposes of constructing unlawful acts under federal and state law or avoiding penalty under the internal revenue code.