I am an RE investor with an LLC, can I run my business as an agent through the same LLC? By doing so, would I be able to invest agent income into real estate "pre-tax"?
Sorry if this is a dumb question, this is my first year with an LLC, and also my first year as an agent. This will also be my second time filing my taxes, so it's already a challenge. Thanks in advance!
@Kayhahn Alikhani Generally, it is best to separate rental activities from non-passive activities, like a real estate agency, flipping or wholesaling, into different LLCs.
If your LLC is a single-member LLC, then it will be disregarded for tax purposes, and you will report your rental activity on Schedule E and your real estate agency on Schedule C of your personal tax return. How you allocate your expenses to deduct against your income is up to you; however, any expense that is obviously for your rental properties should be deducted from rental income and not your real estate agency income.
If your real estate activity is flipping or wholesaling, then you can combine these activities with your real estate agency in the same LLC (because all of these activities are subject to SE tax) and the expenses from one activity could offset the other. (You would have the same tax effect if you setup different LLCs for these activities.)