Tax deductions through LLC

[Anthony Barbato]

I know there are a myriad of tax advantages when owning real estate under your personal name, such as depreciation, improvements/repairs, operating expenses, travel, and home office usage. What I would like to know is whether or not these items are still tax deductible if the real estate is owned under an LLC?

[Anthony Barbato]

Anyone?

[Chris Winterhalter]

@Anthony Barbato

Anthony yes they are most certainly tax deductible. Home office still gets deducted from your personal return however everything else is tax deductible through the business and then flows through to you by way of the K-1. The IRS website has an amazing amount of content for tax deductions for businesses. Remember an LLC is a state designation so you would be classified depending on the setup...i.e. single member LLC (sole proprietor), multi-member (partnership), or corporation (s or c if elected).

I am not an attorney and this is not legal advice.

[Paul B.]

@Anthony Barbato ;

You want an LLC primarily for liability protection on your rentals, not tax advantages. An LLC is a pass-through to your personal return, so you get all the advantages of owning real estate. Hope this helps,

[Brant Richardson]

When you are an owner occupier the tax deductions are better than investment properties. Tax advantages for investment properties held in your name vs. in a LLC will be the same. Things get more complicated if you only own a portion of the LLC.

[Chris Winterhalter]

@Brant Richardson

I completely disagree....tax deductions are way better on income property than owner occupied property. How about depreciation? The only tax benefit that I see better for owner occ homes is the tax free gain when living in a property 2 out of the last 5 years (which maxes out) upon sale.

[Anthony Barbato]

Thank you gentlemen for all the help. And Chris Winterhalter I will definitely check out the IRS website for additional information.

[Luis Toledo]

You should speak with a good accountant to decide what to do. The IRS could care less about your LLC, it's not relevant for tax purposes. As far as they're concerned you're either a C-corp or basically everyone else. That is, either a pass through entity or not.

[Walt Payne]

@Paul B. A single owner LLC is not going to provide much liability protection. Single owner includes husband/wife joint owned. A properly maintained LLC should provide several benefits if a partnership is involved, including protection from debt or liabilities of the partner.