LLC for buy and hold rentals?

Question

Hi,

Currently, I manage my rentals myself.  Do I need to QCD them to a LLC?  Or do I need separate LLC for each rental?  Any pros and cons?  Even with LLC, can I still do taxes in 1040 Schedule E?

Ali Boone · Answer

There's a lot of information in this article (and even more so in the comments section) that might be helpful to consider-

https://www.biggerpockets.com/renewsblog/2013/08/1...

Ultimately though, you should always consult a professional accountant or real estate attorney to confirm any decision. Ones that specialize in real estate investing, preferably.

Rick Johnson · Answer

There is a good article written by BP @Scott Smith  regarding LLC's.

Just like others have mentioned, LLC's are just a tool and a good CPA is another tool you have to use alongside.

Carl Fischer · Answer

@Madhan Sitar

Using LLCs, partnerships, corps, etc for real estate is generally done for asset protection    Tax planning is part of that strategy. Some people also use trusts, IRAs, 401ks, etc all have features that help protect your assets.  Different states have different laws as well.

Many people start exactly as you have -accumulate property and reach a point that they want an ssset protection plan and strategy.

Insurance also plays a role in the overall strategy. Study the subject, quantify your equity, identify the risks, find an attorney, and look for BP experts. Develop and implement your designed plan.

Matt Horwitz · Answer

Yup, you'll still file on a Schedule E. How many properties? And how much into details and organization are you? Also, what state are the properties located in?

Jason G. · Answer

If they have mortgages and you QCD them into an LLC you may trigger the due-on-sale clause of the mortgages.

Christopher Smith · Answer

If its a single member LLC, and all that it holds is rental property you will continue to use Sch E reporting.

LLC for buy and hold rentals?

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