Cash Purchase of duplex and associated tax deductions

[Ryan Wesley]

I've just begun looking into RE investing after having a BP account for a few inactive years. 

Recently I was talking with an agent who proposed the idea of me forming a single-person LLC and then using it to buy an investment property for cash. He said that the entire purchase price could be deducted from income, thus offsetting capital gains from other (ie, stocks) sources. This seems very incorrect to me as the property would be a capital asset with depreciation deductions taken over years, yet the agent insists that he is correct and that this is a common practice for RE pros.

I trust the agent but just think he is ill-informed and/or missing further details regarding his proposal, though I am open to the possibility that I may be missing something as well.

Can anyone shed any light to help bridge the gap here  ?  Thanks.

[Wayne Brooks]

You're right, your agent is clueless about this. An LLC for holding rentals has No tax benefits whatsoever. Either way, the purchase price gets depreciated, as you knew.