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ForumsArrowTax, Legal Issues, Contracts, Self-Directed IRAArrowWhat tax benefits can I get?
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What tax benefits can I get?

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  • Posts 2
  • Votes 0

Michael Stoltzfus
from New Holland, Pennsylvania

posted over 3 years ago

I currently own 3 properties (all in my name) and would like to know the benefits of starting a corporation.
I also want to make sure I'm getting all the tax benefits possible. Any accountant or bookkeeper anyone would recommend?

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Check Rosette Top Subjects:
Rentals and Team
  • Posts 1.3K
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Lance Lvovsky
Accountant from Fort Lauderdale, FL

replied over 3 years ago

There are no income tax benefits of having your rentals in an entity versus in your name. Having rentals in an entity provides other tax benefits, such as more opportunity for tax and estate planning. All deductions that can be taken against rental income can be taken regardless of how the asset is titled.

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Check Rosette Top Subject:
Taxes & Accounting
  • Posts 2.6K
  • Votes 3.4K

Linda Weygant
Investor and CPA from Arvada, Colorado

replied over 3 years ago

I would also caution against putting your real estate rentals into a C or S Corporation.  Only under very specific circumstances is this considered a good idea, so you'd want to make sure you understand the pitfalls (there are a lot of them) very well before going down that road.

An LLC is generally the preferred entity for holding real estate, but it is a pure liability protection play (talk to a lawyer about how that works). The taxes are exactly the same for an LLC as for owning them yourself, the only difference being that you now get a tax deduction for all the expenses necessary to maintain the LLC.

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  • Posts 1.7K
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Daniel Hyman
CPA from Milwaukee, WI

replied over 3 years ago

@Michael Stoltzfus
Google “Schedule E” to see a listing of typical tax deductions for rentals. Better yet, connect with one of the tax pros on BP to see how those deductions can be optimized for your unique circumstances.

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Check Rosette Top Subjects:
Rentals, Managing Tenants, and Tenants
  • Posts 9.2K
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John Thedford
Real Estate Broker from Naples, FL

replied over 3 years ago

You are already getting tax benefits. I would ask you to talk to your CPA about a retirement plan such as a SOLO 401K (there are requirements that must be met). Also, make sure you are taking all deductions legally possible. When you buy a computer for your business, a printer, supplies, use gas driving to a from-all these may be tax deductible. The IRS LOVES real estate investors and gives us a tax break for working our way to wealth:)

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Check Rosette Top Subject:
Analyze Deals
  • Posts 82
  • Votes 25

Eric E.
Residential Investor from Allentown, Pennsylvania

replied over 3 years ago

Solo 401k can provide benefits, but it's doubful that you can transfer your CURRENT properties into the solo401k.   And the Solo 401k is intended for retirment, so you cannot enjoy anyu of the profits until you reach retirement age.   (You can borrow against the solo 401k, but it's realtively short term).    Another Caution:   Not evey CPA is knowledgeable when it comes to these matters...... so ask for references from other investors, shop around, etc.   

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Check Rosette Top Subject:
Analyze Deals
  • Posts 82
  • Votes 25

Eric E.
Residential Investor from Allentown, Pennsylvania

replied over 3 years ago

OMG, I should proofread, so many spelling errors in my last comment!   

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