Purchasing primary home in personal name vs. entity

9 Replies

My fiance and I are looking to purchase our first home and I have gotten mixed views on whether we should be purchasing a property in our own names or to put it in an entity. I haven't spoken to a professional yet on the matter but I've heard of the great BP community and the wealth of knowledge here. So yes, I am asking you guys for your advice on which route to go and why. Also with going with an entity, what would that process look like for getting financed? Thank you so muchain advance for your guys and gals help, we really appreciate it.

P.S. if there is another discussion thread that has this info a simple link will be okay as well, I am knew to BP and have only done basic research through the threads.

-Brandon J.

I can't think of any reason not to go with your personal name.  Others on here are much better versed in tax law, but I believe you may not be able to receive the mortgage interest tax deduction or qualify for homestead exemption if the property is deeded under a llc.  

I believe most myself included use our LLC's as a barrier between our business assets and our personal assets.

Thanks Ed for your advice, I will try and do some digging on the tax advantages. I guess maybe if I got into a car accident and my insurance wouldn't cover something and a law suit comes. If the property is in an LLC instead of our personal names they could not go after the house correct?

Wrong, they go after Your assets. You own the LLC, however you'd have some protection in most states if it were your homestead, so in that case better protection in your own name. Also you have tax free gains as your primary if you sell after 2 years. Just get good insurance, 1-2M umbrella.

Great info Wayne thank you, I will have to look at the homestead laws in my state as I know they're no as good as yours in Florida. 

An entity can never take advantage of the IRS Section 121 exclusion on capital gains. 

Originally posted by @Steve Babiak:

An entity can never take advantage of the IRS Section 121 exclusion on capital gains. 

...except for eligible single-owner, disregarded entities (like a single-member LLC). If it's you and your wife/fiancée, I guess that doesn't help, though.

Thanks guys, good information. 

How are you financing? Most mortgages will be much less down if its owner occupied. Think FHA

I have been looking at FHA recently which may look like the best road to take as you are saying. @Chris Pasternak  

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