Rental Properties - Do I need an LLC?
I am 100% owner of a rental property, should I put it into an LLC or hold it directly in my name?
What is an LLC?
An LLC is a Limited Liability Company that is created by state law. If you decide to create one, you go to the website of your state and create online after paying a fee.
How does it impact my taxes?
It will have no impact, under either scenario it is reported on Schedule E of your Form 1040. There is no additional tax filing, there is no tax benefit except for deducting the LLC state filing fee.
Why do others use an LLC?
Consult an attorney. LLCs may offer additional protection from liability. Some people need this, some do it for privacy reasons since the LLC owns the property in the LLC name.
What state should I set up my LLC?
-
The most practical choice is to create the LLC in the state where the property is located. The choice of state will not impact tax, taxes will be paid in the state where the rental is located no matter where the LLC is set up.
Misc
-
Don't hold in an S Corporation, that is not tax efficient
-
Using an LLC is the most common set up
w
-
w