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Home » Homestead Exemption » How To Organize a Business Conducted on Florida Homestead Property

How To Organize a Business Conducted on Florida Homestead Property

ByJon Alper March 3, 2014May 22, 2020

A client wants to operate a software business on his Florida homestead property located outside a municipality. He is concerned about asset protection. He wants to build a separate building on the property, near his house, to use as an office. He wants to know whether he should create an LLC to own the business and the new building on his property. He proposes that the business would lease the office building from the new Florida limited liability company. 

The asset protection objective is to protect as much as possible under the homestead exemption. Most courts have held that a homeowner or his family may conduct a commercial enterprise on his homestead without losing the exemption provided that the homestead is situated outside a municipality. If this client were to build a structure on his house to be used as a business office I think he would have homestead protection for the residence and the business office. The office would not be protected if it were owned by an LLC, or if the client carved out a piece of his homestead to be owned by an LLC. Homestead protection is afforded only to natural persons and not to business entities. The homeowner, not the LLC, should pay for the construction of the office structure on the homestead property.

The client may form an LLC to operate the business. The LLC can rent the building from the homeowner’s family, or the homeowner may permit the LLC to used the building without rent. Business income and tax losses can be run through the LLC. The LLC may pay all expenses associated with the maintenance and operation of the business building including a reasonably proportionate share of the homestead’s utilities, taxes, landscaping etc.

This arrangement will provide the business the liability shield of an LLC, the tax advantages of an LLC, while maintaining the homestead protection for the entire homestead property and all improvements.

Last updated on May 22, 2020

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      • Business Entities
      • LLCs
      • LLC Operating Agreement
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    • Offshore Planning
      • Nevis LLC
      • Offshore Bank Accounts
      • Offshore Planning
      • Offshore Trusts
    • Judgment Collection
      • Judgment Collection
      • Bitcoin and Cryptocurrency
      • Deficiency Judgments
      • Fact Information Sheet
      • Head of Household
      • IRS Tax Debt
      • Not Paying Judgments
      • Statute of Limitations
      • Wage Garnishment
      • Writ of Garnishment
    • Wills and Trusts
      • Avoiding Probate
      • Estate Planning
      • Gun Trusts
      • Inheritance Tax
      • Irrevocable Trusts
      • Last Will and Testament
      • Living Trusts
      • Living Will
      • LGBT Estate Planning
      • Power of Attorney
      • Probate
      • Special Needs Trust
      • Trust Administration
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      • Attorney Fees
      • Chapter 7 Bankruptcy
      • Chapter 13 Bankruptcy
      • Dealing With Creditors
      • Involuntary Bankruptcy
      • Moral Issues
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