Today’s Rapid City Journal ran a front page story, by Dan Daly, on my last tele-class where I suggested that SD property owners put their real estate into LLC’s as a way to combat proposed Amendment D.  In the article, Sen. Bill Napoli, a strong proponent of the Amendment, discloses that he was aware of the LLC "loophole" and vows to plug it with legislation, whether or not Amendment D passes.

I am having a hard time understanding exactly what the existing "loophole" is. Right now, property owned by an LLC is reassessed just as frequently as any other property, so I am a bit in the dark regarding what he was referring to.

My guess is that if–and that is a big "if"–Amendment D passes and legislators can agree on a "fix," it won’t be a simple one. As with almost every piece of legislation, there will be more unintended consequences that lawmakers will have to deal with.

Whether you are for or against Amendment D isn’t the issue, although I do believe it will increase inequality in the property tax system. If you own property, putting it in an LLC may be a very prudent move if Amendment D passes.

A copy of the teleclass is available to KFG clients at www.kahlerfinancial.com.