Tax advantages from LLC

4 Replies

I currently have three rental homes in Colorado and two duplexes in Minneapolis. If my occupancy rate is up I have good positive cash flow. I'm looking into LLCs and the advantage of one LLC for all properties or 5 separate LLCs, but specifically my question is about what tax advantages might I gain through an LLC? I'm new to the LLC world.

LLCs do not provide tax advantages. The income that the LLC earns passes through to the owner. Most people who use them for their rentals use them because they can provide Liability protection if used correctly. However, many investors who use them for this purpose are not very careful with them. LLCs can be easily pierced in a lawsuit if used improperly. Adequate insurance can provide much of the protection of an LLC. It is best to consult professionals: your lawyer, accountant, and insurance agent to see how LLCs might affect your specific situation.

@Brad Hillman

I am a lawyer and I have a lawyer and an accountant that advise me. But as stated LLCs are pass throughs and provide no tax advantage.

Medium wolfcat properties llc logo cJoseph Catalano, WolfCat Properties, LLC | [email protected] | 716‑402‑1843

Originally posted by @Brad Hillman :

I currently have three rental homes in Colorado and two duplexes in Minneapolis. If my occupancy rate is up I have good positive cash flow. I'm looking into LLCs and the advantage of one LLC for all properties or 5 separate LLCs, but specifically my question is about what tax advantages might I gain through an LLC? I'm new to the LLC world.

 There is nothing extra that you will be able to deduct. I will say that you may want to verify what makes sense in your situation. I LOVE LLCs; however, I do not care for some of the extra costs incurred. 

Medium hta logoSteven Hamilton II EA, Hamilton Tax and Accounting | [email protected] | (224) 381‑2660 | http://www.HamiltonTax.Net

@Brad Hillman

Everyone is correct you want to setup a LLC to protect your liability. Here is a link to video describing how to protect your investment properties

http://tc-investments.com/asset-protection-for-real-estate-investors/ 

Medium hr logo 2Jay Lohn, Lohn/Paulno Investment Properties | [email protected] | 763‑458‑9542 | http://tc-investments.com/