[WSBARP] Showing my ignorance ( again)

Tue May 3 18:44:31 PDT 2022

Chipping in here, I agree with Eric regarding the applicability of RCW 25.15.116.  That section also requires that the admission be “reflected in the records of the limited liability company.”  Section 25.15.136 describes what constitutes those “records.”  

So I don’t think that an annual report by itself can constitute the admission of a member, except perhaps as an indication of the requisite consent of the other members, but I doubt that as well.

Bob Pampell

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Craig Gourley
Sent: Tuesday, May 3, 2022 6:01 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Showing my ignorance ( again)

I agree with both you and Elizabeth.  I just hate having to argue with the IRS over these things with so much money at stake.  I have encountered far more foolish arguments from auditors in the past and pointing out their errors of logic is expensive and risky.  I once had an auditor claim that an  exchange was blown because the Qualified Intermediary did not rent out the property and only held the funds so therefore the relinquished property was not qualified.  That one made it all the way to appeal before I could convince them their argument was nonsense. 

From: wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com>  <wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com> > On Behalf Of Eric Nelsen
Sent: Tuesday, May 3, 2022 4:40 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >
Subject: Re: [WSBARP] Showing my ignorance ( again)

Craig—For what it’s worth, I would argue that putting wrong information on a report made to Secretary of State is just wrong information on a report. In order to actually add someone as a member, something further must be done—vote of the members or whatever the operating agreement requires. See RCW 25.15.116 <https://app.leg.wa.gov/RCW/default.aspx?cite=25.15.116>  on admission of members. 

So I think the remedy is to amend the report to make it accurate; and the fact the report named the wrong people as governors should not have an impact on a 1031 exchange.

That said, an annual report might be a “record” of the LLC such that adding someone to the report actually does add them as a member. But it’s not an automatic consequence; I think there might be arguments against that depending on how the LLC is managed.

Sincerely,

Eric

Eric C. Nelsen

Sayre Law Offices, PLLC

1417 31st Ave South

Seattle WA 98144-3909

206-625-0092

 <mailto:eric at sayrelawoffices.com> eric at sayrelawoffices.com

Covid-19 Update - All attorneys are working remotely during regular business hours and are available via email and by phone. Videoconferencing also is available. Signing of estate planning documents can be completed and will be handled on a case-by-case basis. Please direct mail and deliveries to the Seattle office.

From: wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com>  <wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com> > On Behalf Of Craig Gourley
Sent: Tuesday, May 3, 2022 4:24 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >
Subject: Re: [WSBARP] Showing my ignorance ( again)

Thank you.  Based on that definition I see an opportunity for disaster.  People add “Governors” without understanding the consequence.  In a typical Member Managed LLC , adding a Governor is defined as adding a Member.  This results in elimination of the Disregarded Entity status for federal tax purposes, requires filing of a Partnership Tax return and in my fact pattern probably blows a 1031 exchange resulting in several hundred thousand in federal tax liability.   Law of unintended consequences. 

From: wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com>  <wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com> > On Behalf Of David Daniel
Sent: Tuesday, May 3, 2022 3:04 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >
Subject: Re: [WSBARP] Showing my ignorance ( again)

I believe the term is defined in this context at RCW 23.95.105(12).

David C. Daniel, Attorney

____________________________________
 DEMCO LAW FIRM, P.S.
____________________________________
Phone| (206) 203-6000
Email |  <mailto:ddaniel at demcolaw.com> ddaniel at demcolaw.com

5224 Wilson Ave S #200

Seattle, WA 98118

On Tue, May 3, 2022 at 2:56 PM Craig Gourley <craig at glgmail.com <mailto:craig at glgmail.com> > wrote:

Listmates.  So what exactly is a “ Governor” when it comes to the Secretary of State  and LLCs .  I can not find a definition anywhere.  I currently have people listed as “Governors” telling me that they are not “Members”  and not Managers ( Member Managed LLC).   They claim to have no financial interest but are listed as Governors by the Secretary of State.  I realize that the SOS did not randomly do this and  in this case I know they were added by a family member. Is there any legal ramification to being made a “Governor” or can one randomly add anyone I feel like? 

B. Craig Gourley

Gourley Law Group

Snohomish Escrow

The Exchange Connection

1002 10th Street / PO Box 1091

Snohomish, WA 98291

360.568.5065

360.568.8092  fax

 <mailto:Craig at glgmail.com> Craig at glgmail.com

Be Aware! Online banking fraud is on the rise. If you receive an email containing Wire transfer instructions call us immediately to verify the information prior to sending any funds!

CONFIDENTIALITY NOTICE: This electronic mail transmission may contain legally privileged, confidential information belonging to the sender. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking any action based on the contents of this electronic mail is strictly prohibited. If you have received this electronic mail in error, please contact sender and delete all copies

***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***

_______________________________________________
WSBARP mailing list
WSBARP at lists.wsbarppt.com <mailto:WSBARP at lists.wsbarppt.com> 
http://mailman.fsr.com/mailman/listinfo/wsbarp

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20220503/8077f65a/attachment.html>