Rent your primary home from your own business entity?

[Lana Lee]

Not sure if I picked the right category for posting my question. But I recently heard of an idea of renting your primary home from your own business entity. Let's say I want to buy a new house to live in, can I set up an LLC to make this purchase and treat my own entity as my landlord with a real lease and everything.

I can then depreciate this property and do all kids of tax write off. Is it a crazy idea, or even legal for that matter ?

[Russell Brazil]

@Lana Lee when you own your primary residence, and it goes up in value, you do not pay any taxes on it up to a gain of $250,000 for a single person and up to $500,000 for a married couple if you have lived in the property for 2 out of the last 5 years.  That is section 121 of the tax code. It is perhaps the single greatest tax break available.  The benefits of that outweigh nearly any other scenario.