Updated almost 9 years ago on .
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Tax advantages of having an LLC
Hello BP,
I am a beginner buy & hold investor and in the process of acquiring my first rental property in California. I am also planning on forming a business entity mainly for tax savings.
My questions are:
1. Is this worth it considering this is my first property. Should I wait until I have more properties? Will there be a huge tax advantage for having an entity vs not at this point.
2. I am worried the tax implications of having the rental property in my name and increasing my income tax bracket later on. I understand that the rental income in LLC is pass-through and will be added to my personal income, but was also informed of other deductions I may be qualify for. (i.e. Home business write-off, etc).
3. I know that for some lenders, purchasing it under an individual's name and transferring to an entity is troublesome.
a. In this instance, what are your strategies to put your property in an LLC?
b. If this is a problem, how do you build your business credit in the beginning stage. Are there no other ways except for personally guaranteeing your business transactions until there's enough history in your LLC?
I would appreciate your answers based on a tax saving point-of-view. I would like to avoid discussions on legal protection at this time. Thank you.