How deductibles in an LLC affect personal taxes on 1040

[Pat McQuillan]

Hi Guys,

I'm planning on incorporating a single-owner real estate holding LLC in Delaware/Nevada this year and am wondering what the tax advantages are of doing so. The LLC will focus exclusively on residential multi-family properties. I will be working a full-time job alongside running the LLC, so I will have two different sources of income.

I understand the LLC serves as a pass-through entity and therefore all distributions are taxed at the individual level on my 1040. Deductibles (mortgage, insurance, D&A, etc.) have already been subtracted from the top-line in the company's Schedule C, so I presume these items cannot be deducted from my personal income on my 1040?

Essentially I am hoping someone can explain in clear language exactly what the tax advantages are to owning this type of LLC.

Thanks!
Pat

[Eamonn McElroy]

@Pat McQuillan

As already noted by @Ashish Acharya, a single-member LLC taxed as a disregarded entity has no tax advantages, only potential legal advantages.

Depending on your residence and your facts and circumstances. An LLC might be disadvantageous if you're just starting out. e.g. if you're a California resident.