I have a new rental. it's my first and only rental property as of now. I do have a full-time job as well. I am going to talk to a real estate tax specialist soon, but the question I have right now is this.
-Do I need a special business entity for this rental, or can I just leave it as is, which is in my name
-For tracking and separating income & expenses for the rental from my personal, is it good enough to just have a separate checking account and credit card dedicated to the rental?
Of course, I will also keep all receipts connected to the rental. But can I leave the house in my name and have a separate personal checking account and credit card dedicated to the rental good enough for now.
It's an SFH and currently rented. It was my residence for 5 years, but I moved into a new home at the beginning of the year.
Any Opinions? Or do I need to wait to see a tax specialist to decided?
@Kenneth Kussman . If it was me I would. but I would also create a land trust for the property to be deeded in and have an LLC as the beneficiary of the trust.
Do you have to? No!
The most important thing is to make sure it’s properly insured
You do not need a special business entity for this rental. However, you should speak with an attorney regarding the legality standpoint.
It is advisable to open up a new account for your rental activities. This will allow you to quickly determine which is personal and business expenses at the end of the year.
You may want to speak with an accountant regarding section 121 and the potential to use it for your property that was previously a personal residence.
You also need to determine what the depreciable basis is of the property that you are placing into service now.
All said and done - your taxes are more difficult now and you should likely consult a tax adviser.