Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime

Let's keep in touch

Subscribe to our newsletter for timely insights and actionable tips on your real estate journey.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions
Followed Discussions Followed Categories Followed People Followed Locations
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 7 years ago on . Most recent reply presented by

User Stats

9
Posts
3
Votes
Pat McQuillan
3
Votes |
9
Posts

How deductibles in an LLC affect personal taxes on 1040

Pat McQuillan
Posted

Hi Guys,

I'm planning on incorporating a single-owner real estate holding LLC in Delaware/Nevada this year and am wondering what the tax advantages are of doing so. The LLC will focus exclusively on residential multi-family properties. I will be working a full-time job alongside running the LLC, so I will have two different sources of income.

I understand the LLC serves as a pass-through entity and therefore all distributions are taxed at the individual level on my 1040. Deductibles (mortgage, insurance, D&A, etc.) have already been subtracted from the top-line in the company's Schedule C, so I presume these items cannot be deducted from my personal income on my 1040?

Essentially I am hoping someone can explain in clear language exactly what the tax advantages are to owning this type of LLC.

Thanks!
Pat

Most Popular Reply

User Stats

1,982
Posts
1,765
Votes
Eamonn McElroy#5 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • Atlanta, GA
1,765
Votes |
1,982
Posts
Eamonn McElroy#5 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • Atlanta, GA
Replied

@Pat McQuillan

As already noted by @Ashish Acharya, a single-member LLC taxed as a disregarded entity has no tax advantages, only potential legal advantages.

Depending on your residence and your facts and circumstances. An LLC might be disadvantageous if you're just starting out. e.g. if you're a California resident.

Loading replies...