Hello everyone, I am starting my short term rental journey. Currently, I only own one property with a mortage. Should I open an LLC or should I run it as individual? Furtheremore, If I open an LLC, am I required to change the deed to the LLC? Currently I have a mortage and it seems like a lot of work, if I have to change the deed. Please educate me everyone. Thank you so much! ❤️
I owned a number of MF rentals some years ago. I also have an S Corp., C Corp, and an LLC for an active business I bought.
The LLC was not used as a shield. It's used to form a barrier from one business to another. In the active business, I have employees. I'm required to provide workman's comp, unemployment insurance among other things. The state does on-site inspections of business. If I don't separate this active business from the rentals, they can go into who I hire for my rental business, what are the locations etc. Before Obamacare, it cost me $2,000/month for private health insurance. But if I bouget it under the LLC, by law I have to buy it also for my employees. Thus, I formed the C Corp management company to pay for my health insurance as I cannot charge it off as a rental expense schedule E. The management company paid my insurance and charged me a management fee which can go onto the schedule E as a rental expense.
Get the picture?
Hello everyone, I am starting my short term rental journey. Currently, I only own one property with a mortage. Should I open an LLC or should I run it as individual? Furtheremore, If I open an LLC, am I required to change the deed to the LLC? Currently I have a mortage and it seems like a lot of work, if I have to change the deed. Please educate me everyone. Thank you so much! ❤️
No. An LLC will do nothing for you such as providing asset protection and shielding you from lawsuits. If you have a mortgage in your name, you cannot change it to the LLC. If the bank finds out, they can terminate the mortgage. Just leave things alone.
If you don't deed it to the LLC, then it's a useless LLC costing you fees for no reason.
Hello everyone, I am starting my short term rental journey. Currently, I only own one property with a mortage. Should I open an LLC or should I run it as individual? Furtheremore, If I open an LLC, am I required to change the deed to the LLC? Currently I have a mortage and it seems like a lot of work, if I have to change the deed. Please educate me everyone. Thank you so much! ❤️
No. An LLC will do nothing for you such as providing asset protection and shielding you from lawsuits. If you have a mortgage in your name, you cannot change it to the LLC. If the bank finds out, they can terminate the mortgage. Just leave things alone.
If you don't deed it to the LLC, then it's a useless LLC costing you fees for no reason.
Here is an article on taxation of an LLC in your case. From the discussion, you'll be taxed most likely taxed as an individual. So you'll add a level of complexity and expense for no reason at all.
Here is an article on taxation of an LLC in your case. From the discussion, you'll be taxed most likely taxed as an individual. So you'll add a level of complexity and expense for no reason at all.
Here is an article on taxation of an LLC in your case. From the discussion, you'll be taxed most likely taxed as an individual. So you'll add a level of complexity and expense for no reason at all.
I owned a number of MF rentals some years ago. I also have an S Corp., C Corp, and an LLC for an active business I bought.
The LLC was not used as a shield. It's used to form a barrier from one business to another. In the active business, I have employees. I'm required to provide workman's comp, unemployment insurance among other things. The state does on-site inspections of business. If I don't separate this active business from the rentals, they can go into who I hire for my rental business, what are the locations etc. Before Obamacare, it cost me $2,000/month for private health insurance. But if I bouget it under the LLC, by law I have to buy it also for my employees. Thus, I formed the C Corp management company to pay for my health insurance as I cannot charge it off as a rental expense schedule E. The management company paid my insurance and charged me a management fee which can go onto the schedule E as a rental expense.
Get the picture?
I owned a number of MF rentals some years ago. I also have an S Corp., C Corp, and an LLC for an active business I bought.
The LLC was not used as a shield. It's used to form a barrier from one business to another. In the active business, I have employees. I'm required to provide workman's comp, unemployment insurance among other things. The state does on-site inspections of business. If I don't separate this active business from the rentals, they can go into who I hire for my rental business, what are the locations etc. Before Obamacare, it cost me $2,000/month for private health insurance. But if I bouget it under the LLC, by law I have to buy it also for my employees. Thus, I formed the C Corp management company to pay for my health insurance as I cannot charge it off as a rental expense schedule E. The management company paid my insurance and charged me a management fee which can go onto the schedule E as a rental expense.
Get the picture?