LLC for rental houses, but houses not purchased under the LLC

[Christopher Guerriero]

I own 3 rental houses in New Jersey that were purchased through personal mortgages in my name. My accountant has directed me to form an LLC for each house so she could write off the losses and carry over the loss to my personal tax return, which apparently is not possible without an LLC over multiple years. My first question is whether or not simply forming an LLC is enough to write off the house through said LLC. I would be 100% owner of the LLC but seeing as the property is still not in the LLC's name, I am not certain that I am entitled to claiming the house as an instrument of the business, also any protections from the LLC dealing with seperation of the properties seems to be void in this case. Please let me know if anybody has any experience with this. Thanks

[Michael Seeker]

@Christopher Guerriero - I would suggest doing some research on what this accountant has said. First of all, a sole member LLC is generally a disregarded entity and therefore treated the same as the individual for tax purposes. Second, an LLC for each property is typically a complex way to waste money (added liability insurance for a single LLC tends to be a much more cost effective approach for limiting liability). Third, if the LLC's do not own the properties then their liability protection is completely useless.

It sounds like the accountant has suggested something that would result in their ability to charge you the highest fees for what is otherwise a not very complex setup.

Maybe try and find another accountant...