The question of whether the free provision of real estate by a Limited Liability Company (LLC) in the United States constitutes a profitable activity or not has been decided by an important decision of the Council of State dated November 13, 2023, number 465852. This decision clarifies the notion of a profitable activity and establishes that the simple free provision of real estate by an LLC cannot be considered a profitable activity in itself.
The definition of a profitable activity varies from country to country and can also be specific to each jurisdiction. In this context, the Council of State carefully examined the arguments presented by the parties involved and took into account the tax legislation and the legal principles in force.
In its decision, the Council of State noted that the notion of a profitable activity generally implies an intent to make a profit and active participation in the management of the provided goods or services. In the case of the free provision of real estate by an LLC, it is clear that no direct profit is sought, which definitively excludes a profitable activity.
However, this does not necessarily mean that all free provisions of real estate by an LLC can never be considered a profitable activity. If, for example, the LLC derived significant indirect income from the free provision, such as tax benefits or financial incentives, this could be interpreted as a profitable activity.
It should also be noted that
this decision only addresses the question of the free provision of real estate. Other activities carried out by an LLC could certainly be considered profitable, depending on their nature and the circumstances surrounding these activities.
In conclusion, the free provision of real estate by an LLC in the United States does not necessarily constitute a profitable activity in itself, according to the recent decision of the Council of State. It is essential to take into account the specificities of each case and the applicable legislation to determine whether an activity is profitable or not. It is always recommended to consult a specialized legal expert to obtain personalized and reliable advice in this field.
