First post here so I apologize if this has been answered 100's of times already. But, just curious of other's opinions in regards to starting a business entity and using that for your REI properties. Are there certain times when this would be more or less advantageous? I am sure the majority is tax and liability stipulations, but wasn't sure. I am a high-income earner in my W-2 so just curious if it would help protect personal assets down the road if things got rocky with an investment property. Thanks a lot!
If you are not going to hold RE personally, you want to make sure you hold it in an LLC and not a C or S corp.
I am not a lawyer and this is not legal advice, but LLC's do offer some legal protection, but failure to comply with different regulatory requirements for them can result in them being "pierced". I have most of my income properties in LLCs though.
As a high earner, I would research "short term rental bonus depreciation". You can depreciate most RE assets, but you can only take a limited amount of that depreciation against your active income(w-2) and once you earn over 150k, that benefit goes away. There are things you can do with STRs that allow you to take depreciation against your active income which substantially reduces your tax liability.