Mortgage interest deduction for LLC

3 Replies

This post has been removed.

A single member LLC has no effect at all on taxes, unless you elect special tax treatment. So, everything related to the LLC, including interest, flows onto your personal tax return.

Account Closed 

Just to expand on Jon's response.

A definitive answer requires more information than you shared. A single member LLC can be treated as a sole proprietorship (what the IRS calls a disregarded entity) or as a corporation. How mortgage interest is treated depends upon how the LLC is treated for tax purposes. How is the LLC treated for tax purposes?

If the LLC is treated as a sole proprietorship/disregarded entity, then the mortgage interest is claimed on your personal tax return in exactly the same way it would be if the LLC did not exist. If the property in the LLC is a flip, then you are not allowed a mortgage interest deduction. If the property is being held long-term for future appreciation (vacant land, for example), then the mortgage interest is an investment interest deduction on Schedule A, but only if you itemize. If the LLC property is held for rental use, then the mortgage interest is deducted against rental income on Schedule E (not deducted against other personal income).

Suggest you consult your tax preparer or CPA who can render an informed decision in light of your investment strategy, your LLC activity, and your personal financial posture.

This post has been removed.

Get the Ultimate Beginner's Guide

Sign up today to receive the popular eBook for free!