All Forum Posts by: Jerry Daily

I currently own a rental property that profits at least 15K after all deductions. I also own a rental property in cash under an LLC that profits very little on paper. I also have a primary residence with nearly a JUMBO loan at a high interest rate and I own a vacation place in cash (small trailer not worth much money but i also own the land) in a different state that I pay RE taxes on.

I am considering buying another rental in my name that will generate a loss but will help me build equity and reduce my taxes. If I buy another house that I rent that loses 15K on paper, would that offset the 15K I would be paying in profits for my other property? Do I have any SALT limitations that are impacted since these are not owned by an LLC or do the SALT limitations only apply to primary residences?

Any suggestions on how I can lower my taxable income is appreciated. Below is my current situation.

LLC:

Owns one property in cash worth about 350K. Income is around 20K, Expenses (including paper deductions) about 20K. 

Personal assets/liabilities:

Primary Residence: Have less than 20% equity in this, rest is owned by bank at high interest rate close to 7%. RE taxes are almost 9K/year. 

Rental property: Worth around 500K; About 250K loan at low interest rate. Profits at least 15K after all expenses.

Trailer: Owned in cash, do not rent (wouldn't be worth much to rent). Pay about 2,800 in RE taxes and 1,200 in HOA fees. I am unable to write any of this off due to SALT limitations.

Thanks Bill, I file the taxes all together. I don't have a QI, I will reach out to Dave. 

I am not selling the house I have that is 600K, just the one the LLC owns that is 300K. But i do appreciate that scenario and information.

I currently own a property in an LLC and a separate rental in my own name. I am planning on selling the property i own with my LLC and doing a 1031 to purchase another property. However, I was wondering if when I buy the next property I can just do it in my own name and get rid of the LLC. I am the only member on the LLC, I am married but I would buy this next property only under my name if it avoids complicating anything.

Here are some of the reasons for this: i had an insurance claim with my LLC about 5 years ago and now my insurance is through the roof, interest rates are slightly higher i use the LLC because I will be getting a mortgage. I am also thinking there may be tax advantages because both of the properties I currently own and rent make a considerable amount of money that after all deduction, depreciation etc. I still pay a fair share of taxes. This next house will have a large mortgage and will definitely show as a loss on paper. I am wondering if some of those losses can offset the gains of my current property.

Current Situation:

One house owned by self: 600,000 (has small mortgage)

House owned by LLC: 350,000 (does not have mortgage)

New purchase made by self using 1031 exchange from LLC: 600,000 (mortgage around 300K)

What are the thoughts on having my tenant pay $1,500 per month into my kids 529 (half the rent) and then pay the other $1,500 to me? They could use the tax break for gifting into someone's 529 and I wouldn't claim the money that goes straight into the kids 529.