All Forum Posts by: Account Closed

@Sherman Ho have you put a pencil to creating a plan to reach these goals? I always find that putting some viable numbers in to the equation and considering factors like leveraging capital, cash flow and market selection will help scale this out for you. This can make it both real and obtainable! Best of luck!!

@Matthew Heffernan also, in regards to your wife being an RE agent; there are additional unknown factors that would determine whether an LLC taxed as an s-Corp or an s-Corp would help her based on her earnings. Being a RE agent is considered active income which would be subject to self employment tax. Again, a CPA could help you guys once they better understand your situation.

Have an awesome day!

Hi Matthew,

That's a great question! Investing in rental properties is actually not complex at all when it comes to filing taxes or seeking tax advantages. Investing with a single member LLC or as a sole proprietor provides the same tax advantages no matter which one you choose. Your gains or losses from your rentals is reported on your Schedule E of your personal (1040) return even if you choose to have a single member LLC. A single member LLC for tax purposes is considered "disregarded" for tax purposes and does not file a federal tax return.

Either way you still receive depreciation on your rental and have the ability to take some deductions while other expenses may be added to your cost basis. You are also available as a sole proprietor or a single member LLC to possibly qualify for the 199A deduction.

There may be additional circumstances such as being in a partnership that would be more suited to have a multi-member LLC or what is commonly referred to as a Partnership LLC. Again, same benefits from a tax perspective but a 1065 partnership return is required. It is always best to consult with a real estate friendly CPA who fully understands your situation.

I hope that helps!