Using an LLC to purchase home

Personal Finance
7yFollow

Using an LLC to purchase home

Nick Murray
Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes

Hey all!

I am full of questions, and I truly do appreciate everyones time and effort in their responses thus far; BP really is an awesome community! Ok so onto the question:


  • Let's say I am purchasing a single family home for $600k using seller financing. With this, I have two options one being put it under my personal SSN, or use my LLC to secure the deal (both are on the table with the seller as they have no preference). Does one option have more pros than cons as far as taxes and business expenses etc.? As my LLC is a Real Estate business and I am wondering if there's a specific way to structure it that would be more advantageous.

Thanks again everyone!

    0Reply
    35 views

    Most Popular Reply

    Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    7y
    Originally posted by @Nick Murray:
    Originally posted by @Ashish Acharya:


     Primary residence? 

    Yes, that is the idea!

    Thank you 

    People get LLC to keep their business activities separate from personal asset. If they get sued, their personal asset is not taken.

    You are intentionally putting personal asset in the business's LLC. Does that sound right to you?

    [email protected]941-914-7779
    INVESTOR FRIENDLY CPA®5240 Reviews
    WebsiteView Page
    TaxMD® | Tax Planning Software
    WebsiteView Page
    3Reply
    See this reply in the discussion

    12 Replies

    Jump to latestLatest
    • Ashish AcharyaBusiness Member
      CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
      7y
      Originally posted by @Nick Murray:

      Hey all!

      I am full of questions, and I truly do appreciate everyones time and effort in their responses thus far; BP really is an awesome community! Ok so onto the question:


      • Let's say I am purchasing a single family home for $600k using seller financing. With this, I have two options one being put it under my personal SSN, or use my LLC to secure the deal (both are on the table with the seller as they have no preference). Does one option have more pros than cons as far as taxes and business expenses etc.? As my LLC is a Real Estate business and I am wondering if there's a specific way to structure it that would be more advantageous.

      Thanks again everyone!

         Primary residence? 

        [email protected]941-914-7779
        INVESTOR FRIENDLY CPA®5240 Reviews
        WebsiteView Page
        TaxMD® | Tax Planning Software
        WebsiteView Page
        0Reply
      1. Nick Murray
        OP
        Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes
        7y
        Originally posted by @Ashish Acharya:


         Primary residence? 

        Yes, that is the idea!

        Thank you 

        0Reply
      2. Wayne Brooks
        Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
        7y

        There is No tax advantage to buying any property in an llc....any expenses deductible to an llc are deductible to that same person.

        As a for buying a primary in an llc....no advantage and a bunch of disadvantages...you’d lose your section 121 exemption when you sell, no homestead tax exemption, no conventional/fha financing if you want to refi.

        2Reply
      3. Nick Murray
        OP
        Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes
        7y
        Originally posted by @Wayne Brooks:

        There is No tax advantage to buying any property in an llc....any expenses deductible to an llc are deductible to that same person.

        As a for buying a primary in an llc....no advantage and a bunch of disadvantages...you’d lose your section 121 exemption when you sell, no homestead tax exemption, no conventional/fha financing if you want to refi.

        Great information! Thank you!

        0Reply
      4. Ashish AcharyaBusiness Member
        CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
        7y
        Originally posted by @Nick Murray:
        Originally posted by @Ashish Acharya:


         Primary residence? 

        Yes, that is the idea!

        Thank you 

        People get LLC to keep their business activities separate from personal asset. If they get sued, their personal asset is not taken.

        You are intentionally putting personal asset in the business's LLC. Does that sound right to you?

        [email protected]941-914-7779
        INVESTOR FRIENDLY CPA®5240 Reviews
        WebsiteView Page
        TaxMD® | Tax Planning Software
        WebsiteView Page
        3Reply
      5. Nick Murray
        OP
        Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes
        7y

        @Ashish Acharya

        It certainly does not, thank you for answering! Good way to put it.

        1Reply
      6. Scott SmithPro Member
        Attorney · Austin, TX · Member since 2014 · 1k+ posts · 932 votes
        7y

        @Nick Murray, here is a graphic that identifies an asset protection plan, which an LLC is one element used to support this plan. LLC's generally are used to isolate business assets from personal assets, and as the business grows to separate them to reduce risk.

        The old adage of "don't put all your eggs into one basket" captures alot of what the LLC's are made for.

        Here is more information that may be helpful.

        Podcast Guest on Show #109
        2Reply
      7. Nick Murray
        OP
        Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes
        7y

        @Scott Smith this is awesome. Thank you! I appreciate the info. It makes a lot of sense, the visualization definitely helps wrap my head around everything.

        I added the link you shared to my reading list for this morning!

        Thanks again!

        0Reply
      8. London Crabil
        Member since 2019 · 7 posts · 5 votes
        7y

        @Nick Murray

        What would be the primary goal in purchasing under the LLC? I dont want to assume, but is it for tax or protection purposes? Have you considered establishing a trust and having the trust be the owner? Every state has different trust laws. This method may provide you with the goals you are trying to achieve as trusts can be customizable.

        1Reply
      9. Nick Murray
        OP
        Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes
        7y
        Originally posted by @London Crabil:

        @Nick Murray

        What would be the primary goal in purchasing under the LLC? I dont want to assume, but is it for tax or protection purposes? Have you considered establishing a trust and having the trust be the owner? Every state has different trust laws. This method may provide you with the goals you are trying to achieve as trusts can be customizable.

        Yeah, the idea was for the potential tax purposes it could potentially provide having it be a business expense etc. I have never looked into the trust situation, but i am going to look into that now! I appreciate the reply!


        Thank you!

        0Reply
      10. London Crabil
        Member since 2019 · 7 posts · 5 votes
        7y

        No problem, glad to help. Do you have more than one residence? Did you already set up an LLC? If you have more than 1 and you have an LLC it wilL be cleaner legally to write off the "expense" of the 2nd property as the place you stay, work, hold meetings ect when youre not at your primary residence. Also travel, food, gas ect can be written off when traveling from ine to the other. I would talk to your CPA. hopefully that benefits you or someone else. I have had up to 4 homes in different states with only one being a tax home and business address. The others were all write-offs.

        1Reply
      11. Nick Murray
        OP
        Specialist · Gulf Breeze, FL · Member since 2019 · 31 posts · 6 votes
        7y

        @London Crabil

        That’s exactly my thought process. I have two properties, will have more soon! I need to live in one of them haha, so I was trying to figure out the best way to structure it. I am meeting with my CPA on Friday, to discuss this among other things.

        Thank you again! Very helpful

        0Reply
      Join the conversationCreate a free account to reply, vote on answers and follow this thread.
      Log InJoin for Free