New Investor Tax Help

[Juan Figueroa]

 Hello, 

I am a new investor. Purchased a property in Vegas with a partner. I created a LLC prior to the purchase. Need help / advice on how take advantage of my using LLC for tax purposes. I am completely lost. I know that I am a little late for 2023, but have to start somewhere. What recommendations do you have? Any CPA recommendations for a small investor. I need some guidance and hopefully can still get some benefit for this upcoming tax season and better plan for 2024. Appreciate your advise and recommendations.

[Sean O'Keefe]

Juan Figueroa there is a debate among real estate investors whether or not you need an LLC. CPA and Lawyers will always tell you to get one (and contrary to popular rumors this has nothing to do with getting more $ for filing fees). Not owning your rentals through an LLC exposes you to more risk, even if you have an insurance policy on rentals.

However, as a new investor, you may encounter some challenges and opportunities leveraging the LLC. Here are a few below:

• Generally, buying through your personal name can reduce the interest rate - commercial rates on LLC mortgages are usually higher but you can research this
• Most LLCs on incorporation don’t have any credit so it may be difficult to find. a lender
• If you own the property in your personal name you are exposing yourself to more risk and will want to transfer the property into LLC as soon as you can
• If you own property in your personal name and transfer to LLC the lender may not allow or can call the entire loan

LLC or personal ownership you need insurance.

If you search the forums for this topic using the magnifying glass feature in top right corner of your screen on BiggerPockets you will find a lot of discussion on "Quit Claim" "Buying through LLC", "LLC or not" etc.

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*This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.