NC tax laws on deducting mortgage interest

[Daniel Murphy]

Hi all, this is my first real question here... a CPA recommended that for a residential rental business in NC I should start an LLC but buy the homes in my own name because a business cannot deduct the mortgage interest but an individual can. I'm having trouble wrapping my head around that; if the homes are in my name what is the point of the LLC? Also, does that sound right (the part about a business not deducting the mortgage interest)?

[Brandon Hall]

@Daniel Murphy ask the CPA to cite the code in which they are referencing. There is likely a misunderstanding with the information provided to the CPA, so being able to review the code will help provide clarity and a meeting of the minds.

Interest on rentals is considered "business interest" and is fully deductible regardless of whether an entity is used. Perhaps there is a misunderstanding with who's name the mortgage is in but this can be easily fixed on your books.