Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 11 years ago,

Account Closed
  • Full-Time Investor
  • Charlotte, NC
1,562
Votes |
2,280
Posts

How to structure owner occupied office space with tenants

Account Closed
  • Full-Time Investor
  • Charlotte, NC
Posted

So most people seem to recommend an S corp for flips (and new construction specs), and an LLC for long term holds. I've adopted this tax strategy, and my LLC has now purchased an office building. The building has 5 key man offices, where everyone would share restrooms, a kitchen, and two conference rooms. Utilities are included in the rent as well. I use one office and rent out the other 4, but I'm wondering if there's a superior way to structure the rent from the space I occupy. For instance, should my S corp pay rent to the LLC (and thus get the deduction), or would that be a wash with the income my LLC would get from the rent?

As a side note, my CPA told me I'd have to prorate all utilities for the sq footage I occupy vs the sq footage I rent out. It seems to me, if my S corp rents the space from the LLC, then I wouldn't have to prorate bc all offices would now be rentals. If that's the case, even if having the S corp pay rent doesn't give me a tax benefit, I think I'd still prefer this method due to less complication and prorating of bills.

Does anyone have any ideas? I'd like to see the best way to maximize tax benefits. Thanks :)

Loading replies...