Tax question regarding LLC

8 Replies

Can the filing fee's for an LLC as well as my attorney fee's for this be used as a deduction against my rental income?

To my knowledge, yes you can. Any and all business related expenses can be deducted.

John Thedford, Real Estate Agent in FL (#BK3098153)

@Brian Zaug ,

Yes, if it was less than $5,000. Anything more has to be deducted over 180 months. 

Items that are ordinary and necessary in the business industry can be currently expensed or capitalized and depreciated.

Creating an entity for asset protection is ordinary and necessary in our industry.

Basit Siddiqi, CPA

Thanks everyone for answering. 

@brian zaug

Hi Brian, im just curious to know why is it 180 days?

Originally posted by @Jason Vo :

@brian zaug

Hi Brian, im just curious to know why is it 180 days?

It's 180 months.

The costs associated with forming the LLC ( Filing fee, attorney fees and so forth ) are considered Organizational cost and are only deductible if less than 5000. Anything more than that has to be capitalized and amortized ( deducted) over 15 years ( 180 months).

I highly doubt the org cost will be more than 5000 for normal LLCs. Some of the larger deals might go over 5000. 

Organizational fees are not the Start-up the cost.  Both of them are treated differently. 

There are other rules if you are already in the business and create another entity, but out of the scope for this post. 

Generally, anything before 5000 can be deducted for organizational and startup cost. 

Thanks Brian for the info.

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