Renting from your own LLC ?

[Jray Randall]

I recently started a retail store and I am running the business in a building owned by my real estate LLC company. Is there any tax benefits from my retail store paying a higher or lower rent?

[Ashish Acharya]

Originally posted by @Jray Randall:

I recently started a retail store and I am running the business in a building owned by my real estate LLC company. Is there any tax benefits from my retail store paying a higher or lower rent?

Yes there is. Your renting might not be considered a trade or business’s on it own to qualify for 20% 199A deduction added by the tax reform. But, you can bring the rental into the trade or business category because you are owner on both end. 

 Being said that, with the rents structuring, you can play with rents to optimize 20% deduction. How do you do that? You probably will not do it yourself and will have to seek out help from tax professionals. 

Also, you can kind of optimize your non-passive loss from the rental with self- rental recharacterization rule under sec 469.