LLC and Taxes with regards to rental property

[Brian Versetti]

Hello to all, I am relatively new to owning and renting out property so any help here will be much appreciated! I have rent that comes in for one part of my building and before too long I should have additional rent from the other parts. My accountant, when doing my 2020 taxes, suggested I form an LLC to own my real estate and I am now trying to put my building into that LLC name to lessen my tax burden. So to my questions: what is the best way to transfer ownership of my building (I ask because a lawyer that I spoke to said that I must sell it to the LLC for what is considered a reasonable amount, is this true or partially, or is there abetter way to do this?

Secondly, once the property has been transferred how do I get the money into my hands with less tax burden than it being a w-2?

Thank you for all help!

[Ashish Acharya]

Originally posted by @Brian Versetti:

Hello to all, I am relatively new to owning and renting out property so any help here will be much appreciated! I have rent that comes in for one part of my building and before too long I should have additional rent from the other parts. My accountant, when doing my 2020 taxes, suggested I form an LLC to own my real estate and I am now trying to put my building into that LLC name to lessen my tax burden. So to my questions: what is the best way to transfer ownership of my building (I ask because a lawyer that I spoke to said that I must sell it to the LLC for what is considered a reasonable amount, is this true or partially, or is there abetter way to do this?

Secondly, once the property has been transferred how do I get the money into my hands with less tax burden than it being a w-2?

Thank you for all help!

 Brain, we can tell you don't have good support here. 

1) Transferring/Contributing to the LLC is a non-taxable transition. Please don't sell it to the LLC.

2) LLC is not going to save you taxes.

3) The way you pay yourself is via distribution. Distribution is not taxable but you have to pay taxes when you earn that distribution.