All Forum Posts by: Logan Allec

@Brian Zaug, no, you lose the deduction to deduct your real estate losses against your wages at income levels at or over $150,000 as a non-real estate professional.

@Elaine Hester yes, it is expensive to set up and operate an LLC in Californi

And even if you form an LLC out of state you will still likely be required to register your LLC in CA and pay the annual $800 tax.

That being said, whether an LLC (or some other entity) is necessary for your situation is something only a qualified asset protection attorney can tell you.

But in general, yes, a free-and-clear asset is a tasty target.

Good luck.

@Blake Milliken, I'll send you a PM on this topic.

@Blake Milliken, make sure you understand the tax implications of investing out-of-state as a California resident.  Good luck!

1. I don't believe so, but I'm not a mortgage professional.  @Chris Mason is a Bay Area lender.

2. Well, what does your lease say?

3. Ditto.

That being said, it's extremely common for people to sell their rentals with leased tenants in-place.

"If I put my rental into my business llc can I lower my taxes by offsetting my business income with my rental loss."

The LLC makes no difference here. The only two situations in which you could offset your active business income with your passive rental losses is if:

1. You are a real estate professional, or
2. You make less than $150,000 from non-real estate activities, and even then you could only offset $25,000 (at most; your exact amount depends on your income from non-real estate activities).

"Also I heard that with new tax law an llc has to pay taxes on only 80 percent of your llc income. So everyone who has rentals which have positive net income should be putting it into llc. Is that correct ?"

No. If the 20% deduction applies to rentals at all (which most practitioners feel it does), then you will get the deduction whether or not you hold in an LLC or not.

Feel fre to PM me with any more questions.

@Oleg P., just curious where you invested in Northern California.

@Ken D., make sure you understand the tax implications of investing out of state as a California resident.  Good luck!