Leasing to yourself?

[Jeremy D.]

Quick question about tax implications of leasing to yourself. I am a 60% owner of an LLC with 20 or so rental units in it. If this LLC were to buy a property and rent it to me, would this be a problem tax wise?

Here is what i am thinking... The mortgage interest + taxes + HOA fees + depreciation = $2,100/mo. I would personally sign a lease with the LLC and pay $1,500/mo in rent. The remainder would be a taxable loss by the LLC.

Is this ok? $1,500/mo is a fair rent for this property. I can justify the $600/mo taxable loss because a portion of the property would be used as an office for the LLC.

Is this smart/stupid/illegal?