Business Income that Doesn't Increase My Personal Income

[Richard Benjamin Wilhite]

How should I set up my business structure so that income from my rentals doesn’t increase my personal income reported to the IRS?

I currently have three properties that I purchased in my name as personal residences. I lived in them each for one year and then rented them out. I collect the rent in a business bank account that I opened with a sole proprietorship.

I'm now buying a fourth property under a newly formed LLC.

Should I place the first three properties that I bought in this new LLC?

Should I change my business bank account to the new LLC?

Or should I open a new LLC that acts as a sort of "property management" that collects the rent from all of my other properties and pays out the expenses?

Do I have any other options?

[Matt Devincenzo]

You need to talk with a tax pro that knows your specific info to get any good feedback here. Ultimately I don't think there is a way...most small rentals operate in a manner where they pass through to your personal return. Any of the tax options that don't pass through are likely taxed at a higher rate or create other issues with their structure.