10% Vacation Loan Use and Tax Benefits

[Nicholas Kania]

All,

It is my understanding that I can not use a 10% second home loan and put it in an LLC to reap the tax benefits if I STR the property most of the time. I am wondering if I create an LLC to use as a managment company and use the tax benefits created within that. Does this make any sense? I get that I will not be able to depreciate the house under the LLC but will I if it is for "personal use" but use the monies to furnish and manage the property at least I will have that.

[Bill B.]

Being in an LLC has ZERO tax benefits. It doesn't create tax deductible expenses you don't already have.

You CANNOT depreciate the house if it’s for personal use, ONLY if it’s a rental use.