First Duplex Should I LLC?

[Grant Bublitz]

I am about to close on my first duplex and will be living on one side (top) while renting out the other (bottom).
Is there any reason to put the duplex in an LLC?

Just have the rent made out to me and have a new checking account just for rent?

At what point is it beneficial to have it an an LLC?

[Steve Vaughan]

I disagree with our learned colleague.  Especially because it is a residential property AND your primary residence, keep it in your name.  When you sell, the primary home cap gains tax exclusion can not be taken if inside an entity.   That's up to $250k if single, $500k if married! 

I own all my little residential properties in my own name.  Crazy, I know. I act above board and carry good insurance.  You will run into borrowing and insurance issues placing residential property inside an entity.  When these are paid off (soon) I will re-visit the 'asset protection' issue.  All of my commercial (5+ unit apt bldgs) are in LLCs. That's a key distinction. Commercial property = business entity.

What I have done is create a mgt co for property I have interest in so tenants do not make rent payable to me personally.  After consulting tax and legal pros, I established an s-corp for that purpose. Do not own assets inside an s-corp, though.  

Consult legal and tax advice.  When the attorney rants about being sued, ask the probability of such an event.  In 13 years of owning little residential property in my name, I haven't even come close to that.  Good luck @Grant Bublitz!