What is the use of llc holding companies?

[Patrick J.]

What's the use of a holding company for rental properties? Is it suppouse to reduce taxes? Reduce liability? Reduce management headache of "needing" multiple bank accounts?

[Eamonn McElroy]

Disagree with the previous poster.  LLCs generally have no tax effect if they are taxed as a disregarded entity or partnership.

Maybe the taxes change if a corporate tax election is made for the LLC, e.g. S Corp or C Corp, but appreciating assets like real estate generally should not be held in a corporate tax entity.