New Tax Bill Affect Investment / LLC ?

Question

We are in the process of getting ready to close on an investment house we will rent out as a short term rental. I was planning to create an LLC for the investment and use it for all expenses and income related to the rental. I read that the new tax bill affects deductions. Will I no longer be able to deduct expenses for the investment unless they end up being higher than the 24k standard deduction for a married couple or will I be able to take the 24k deduction for ourselves and still deduct investment expenses because of the LLC?

Derrick E. · Answer

This is how I understand it as well. So if true, does this mean it is actually beneficial from a tax stand point to have an LLC?

Can someone take that additional 20% off even without the LLC?

Rick S. · Answer

It is my understanding that if the property is owned by an LLC, then the profit is reduced by an additional 20% before it passes thru to the members personal income. in effect, only 80% of your income is taxable... unless I am missing something.

John Mclain · Answer

You will be taxed on profits from the LLC pro rata to your percentage of ownership. Profits will still be determined by subtracting expenses from total revenue. This will result in your profit (loss). No change in that regard. How much tax you pay on the profits may be different with the new tax plan. Your accountant can walk you through that part.