NFA trust or LLc????

[cositc]

Hey i think i know what i'm going to build a sbr ar-15. But i was wanting to know if i should do a trust or a llc? and i would like to know how to do each and how much it cost to do each and what do they offer that the other dose not?

 

[CountryBoy19]

There are some other threads discussing the benefits of trust, LLC, or personal ownership so I'm not going to go into great detail but I will lay down the basics.

Benefits of a trust vs. LLC
No maintenance fees, yearly filing etc.
Possibly cheaper but highly dependent

Benefits of an LLC vs. Trust
Can go on forever if "maintained"
Can be sold to others if you wish to sell the entire collection and there will be no transfer fees.
like above, the "company" can be willed to someone and upon your death they can take immediate possession with very few changes/paperwork necessary (no Form 5 transfer necessary for the heirs to take possession)

Disadvantages of an LLC that I can see
Cost to have it written: I thought about an LLC, but my dad quickly talked me out of it when he said it took about $1500 to have his LLC drawn up.
Maintenance costs: IIRC, you have to pay the state a yearly fee to maintain the existence of your LLC
Tax purposes: you have to file annual taxes for your LLC even if you didn't make/lose any money, because your LLC is actually considered a business entity you MUST file taxes.

Disadvantages of a trust:
Can't be sold off or transferred as a whole without paying transfer taxes.

As far as cost, a trust could be anywhere from $20-2,000 depending on what you want. Mine cost $600.

Cost of an LLC, I never really checked into it, but my dad's (for an actual business that he runs) cost him $1500 plus the annual fee. I'm not positive on the annual fee but I think it may be around $40.

 

[steverino]

A few additions to the reply by CountryBoy19 -
If you already have a grantor trust for estate planning purposes then this is the way to go. There is no additional cost.

If you want an LLC then remember that the LLC is treated as a partnership by default unless you elect to be treated as a corporation. There is no reason to elect treatment as a corporation since there is a separate level of taxation.

If the LLC is formed with one owner (member) then a separate return is not required. The LLC activities are shown on Schedule C which is included in your personal form 1040. A separate LLC should be much cheaper, $300-$500, since the expensive part of an LLC formation is the buy sell agreement.