Ownership/Tax Flowchart

+this page is for entertainment and not intended as tax, financial or other advice. for that please hire a professional

A Wyoming LLC as a holding company is often chosen for its strong asset protection, privacy benefits, and low maintenance costs. When structured as a Disregarded Entity, the LLC is ignored for federal income tax purposes, and its income and losses pass through to the owner’s personal tax return. This is typical for a Single-Member LLC (SMLLC) owned by an individual or another entity, unless it elects to be taxed as a corporation.

Key Features of the Structure

Wyoming LLC: Formed in Wyoming, benefiting from no state income tax, strong asset protection (including charging order protection for SMLLCs), and anonymity (members/managers are not publicly disclosed).
Holding Company: The LLC does not conduct active business but owns assets or other LLCs (subsidiaries), isolating liabilities and enhancing privacy.
Disregarded Entity: For tax purposes, the IRS treats the SMLLC as if it does not exist separately from its owner. The owner reports the LLC’s income/losses on their personal tax return (Form 1040, Schedule C, E, or other applicable schedules).

Flowchart Description
The flowchart illustrates the ownership and tax flow for a Wyoming LLC holding company that is a Disregarded Entity. It shows:

An individual (or entity) as the sole member/owner.
The Wyoming LLC as the holding company, owning subsidiary LLCs or assets.
The tax flow, where income/losses pass through the Disregarded Entity to the owner’s tax return.

graph TD A[Individual Owner] -->|Owns 100%| B[Wyoming LLC - Holding Company, Disregarded Entity] B -->|Owns| C[Subsidiary LLC 1 - Real Estate] B -->|Owns| D[Subsidiary LLC 2 - Business] B -->|Owns| E[Assets - Stocks, IP] C -->|Income-Losses| B D -->|Income-Losses| B E -->|Income-Losses| B B -->|Pass-Through| F[Owner Tax Return - Form 1040] style A fill:#f9f,stroke:#333,stroke-width:2px style B fill:#bbf,stroke:#333,stroke-width:2px style C fill:#bfb,stroke:#333,stroke-width:2px style D fill:#bfb,stroke:#333,stroke-width:2px style E fill:#bfb,stroke:#333,stroke-width:2px style F fill:#fbf,stroke:#333,stroke-width:2px

Here is the flow of a Wyoming llc as a holding company in table format

Entity Tax Form Notes
Holding Company (SMLLC) None (disregarded) No separate federal return required
Individual Owner Form 1040 Main personal income tax form
Subsidiary LLCs (if also SMLLCs) None (disregarded) Their activity rolls up to the holding company
Income Type Schedule C, E, or F Depends on business type (e.g., rental, consulting)

Here is the flow of a wyoming llc as a holding company(simplified)

graph TD SubsidiaryLLC["Subsidiary LLC (e.g. Rental Property)"] HoldingCompany["Wyoming LLC (Holding Company)"] Individual["Individual Owner (Single-Member LLC)"] TaxReturn["Income Flow (Form 1040, Schedule C/E/F)"] SubsidiaryLLC --> HoldingCompany HoldingCompany --> Individual Individual --> TaxReturn

How to get a Wyoming LLC

graph TD A[Owner-Investor] --> B[Check Single-Member LLC Suitability] B --> C[Is Single-Member LLC Desired] C -->|Yes| D[Choose Wyoming LLC Name] D --> E[Appoint Registered Agent] E --> F[File Articles of Organization] F --> G[Obtain EIN from IRS] G --> H[Open Bank Account] H --> I[Draft Operating Agreement - Optional] I --> J[Owns Subsidiaries or Assets] J -->|Yes| K[Subsidiaries-Assets Disregarded] K --> L[Report on Owner Tax Return - Form 1040] L --> M[Holding Company Operational] C -->|No| N[Explore Multi-Member LLC or Corporation] N --> M style A fill:#f9f,stroke:#333,stroke-width:2px style B fill:#bbf,stroke:#333,stroke-width:2px style C fill:#bfb,stroke:#333,stroke-width:2px style D fill:#bfb,stroke:#333,stroke-width:2px style E fill:#bfb,stroke:#333,stroke-width:2px style F fill:#bfb,stroke:#333,stroke-width:2px style G fill:#bfb,stroke:#333,stroke-width:2px style H fill:#bfb,stroke:#333,stroke-width:2px style I fill:#bfb,stroke:#333,stroke-width:2px style J fill:#bfb,stroke:#333,stroke-width:2px style K fill:#bfb,stroke:#333,stroke-width:2px style L fill:#bfb,stroke:#333,stroke-width:2px style M fill:#fbf,stroke:#333,stroke-width:2px style N fill:#fbf,stroke:#333,stroke-width:2px

Additional Notes

  • Annual Report: Wyoming LLCs must file an annual report with the Secretary of State and pay a small fee based on in-state assets.
  • No State Income Tax: Wyoming does not impose a state income tax, making it attractive for holding companies.
  • The term “consolidated tax return” does not apply to disregarded entities. Instead, income flows through to the individual owner’s personal tax return.

References

+this page is for entertainment and not intended as tax, financial or other advice. for that please hire a professional

Your Situation: Simple Estate, Two Adult Children, 50/50 Split

Sample scenario:

  • Two grown, successful children
  • No other heirs or beneficiaries
  • Assets are to be split evenly
  • No special conditions or disinheritance

This is exactly the kind of scenario where online trust services can work well — if everything stays simple and uncontested.

    Why You Might Still Want a Lawyer
    Even with a simple plan, here’s what a lawyer adds:

    Legal Precision
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    When Online Trusts Work Well
    Online services like LegalZoom or Trust & Will are best suited when:

Your estate is modest and unlikely to trigger estate taxes

You have no minor children, no special needs, and no blended family dynamics

You’re comfortable managing the process yourself

You’re confident you’ll fund the trust properly (i.e., retitle assets into the trust)

Option Pros Cons
Online Trust (e.g. LegalZoom) Lower cost
Convenient and fast
Good for simple estates 		Limited customization
Risk of errors or omissions
No legal advice or funding help
Attorney-Drafted Trust Fully customized
Complies with state law
Includes legal advice and funding support 		Higher upfront cost
Requires appointments and time