LLC impact on personal tax

[Sven D.]

Good morning,

I'm looking at using a hardmoney lender on purchasing a home that I will use as a primary residence while I rent out the remaining rooms. Eventually I will sell the home. This hardmoney lender only loans to LLC's. Oregon has a very easy LLC forming process, my question is, if I form an LLC to begin the application process to acquire a loan, will my personal taxes be negatively affected this year? Or become overly complicated? The LLC will not be showing profits because I'm using it to acquire a property that I would hold for a minimum of 6 months. Any insight would be helpful.

Thank you.

[Edmund Ricker]

Hi @Sven D.,

The LLC really does not change your taxes. If you create a single member LLC it's income/expenses are reported on your 1040 individual return. In this case if the LLC held rental property or your personal residence having rooms rented, it would most likely be filed on schedule E.

I would also caution you on forming your own LLC. There is a law firm in your area that will create the entity for you for $400 and it will be done correctly.

I hope this helps.

Ed