Primary Residence using LLC Questions

1 Reply

I'm looking to purchase a primary residence.  Due to my profession, I need to maintain some level of anonymity -- i.e. need to avoid people easily searching for my name on the county deed/property websites.  (Not trying to avoid taxes or anything similar)

It seems that utilizing a LLC, established in New Mexico/Wyoming for example, may be the best way to achieve this, as a holding company. Additionally, for estate planning reasons, the LLC would be owned by my revocable living trust. A EIN and associated bank account would be created for the LLC -- and the property paid for by the LLC (no financing associated with this property).

A few quick questions:

a. Are there any immediate or downstream issues that I may be overlooking with this type of setup?

b. Under this setup, if I decided to sell the residence after 2 years, does the Capital Gain Exclusion (Section 121) still apply? (Single Member LLC ("disregarded entity"), owned by my revocable living trust).

Additional note: The State of primary residence does not consider owning real or personal property as transacting business -- thus, registration of the foreign LLC would not be required.

@Jonathan Phillips you need to meet with an experienced real estate accountant and lawyer about that. If you own a property through an LLC, you won't be able to receive any tax benefits for owning a primary residence (mortgage interest rate). If you LLC simply owns the property, it's not clear how that would affect your state and federal taxes since the property is being used by you for personal use. So, you should talk to a lawyer and an accountant.