Should I move Second Home into LLC

[Hannah Walker]

Hi all.

Thanks in advance to those who help me figure this out!

My husband and I live in SF, we own our home here and recently decided to get a second, vacation home near Twain Harte (2.5hrs) from SF.  The plan is to use this as a second home AND Airbnb to help cover costs.

Our mortgage broker advised a second home loan, as it had much better interest rates.  We will also use it for more than 14 days a year.

I recently started to explore setting up an LLC for the Airbnb vacation rental. I thought the LLC will help mitigate any liability and offset taxes for the business etc. However, from my research, it doesn't seem advantageous to put our second home into the LLC (without changing the deeds to LLC name and thus losing the second home interest rates).

I wondered what advice people have; to ensure I get the best tax benefits and ensure my liability is covered.

* Should I keep LLC and get an even better umbrella policy to cover us for any liability concerns.

* If the second home is not under the LLC, do I even need an LLC are there other ways to get the tax benefits?

Thanks so much. I am a first-time investor.

Hannah

[Michael Baum]

Hey @Hannah Walker, I don't think you need an LLC. Get the correct STR coverage for your vacation home and have an umbrella. That should cover you in case of any issues.

Once you get rolling, you need to get a good CPA who will make sure you get all the tax benefits. Schedule E will allow you to deduct all operating expenses. It will be prorated depending on how much you use the house for personal use.