Spec House ( Taxes: LLC vs. Individual)

[Zack Hawkins]

We are going to be buying property and building a spec home shortly and need to understand the pros and cons of doing this deal through an LLC vs. as individuals, from a tax perspective. Is there a difference?

I already own an LLC (residential contractor) and understand the liability benefits of running this deal through the LLC.

I'm only asking about the differences from a business perspective (taxes, showing the income as business income vs. individual income, etc.).

Pros, cons, anything I should know that I might not know to ask?

Thanks all!

[Joshua Thompson]

Hi Zack,

A big item to think about here is your intentions for the property. Will this be a rental or something you'll be living in? I'm assuming it would be a rental but assumptions cause errors so I won't get too much into it. I would determine your intentions for the property, if lenders will lend directly to your LLC, your purpose for doing this as a business, and if you plan to build homes again. Once you can answer these questions I highly recommend reaching out to an accountant willing to consult you to address these items and dive deeper into your tax situation.

I hate to give a broad answer but it's difficult to answer this without additional information and directly in the forum. This is a great one-on-one question with an accountant.