Buying Investment Property under LLC with Personal HELOC

4 Replies

Hi BP,

I have recently bought a 6-unit residential investment property with a personal HELOC. This property is under an LLC. Is there a way of getting a tax deduction on the interest I am paying on the HELOC?

Thanks,

Pedro 

Originally posted by @Pedro Morais :

Hi BP,

I have recently bought a 6-unit residential investment property with a personal HELOC. This property is under an LLC. Is there a way of getting a tax deduction on the interest I am paying on the HELOC?

Thanks,

Pedro 

Yes, if this is SMLLC then you just deduct the interest. SMLLCs are disregarded for tax purposes, all the payments you make can be deducted at the business level activity if it's a business deduction. Interest paid on HELOC can be deducted under the interacting rule.

If you have a partnership, the interest can be deducted as unreimbursed partnership interest on page 2 of Sch E. 

 

@John Warren and @Ashish Acharya thank you very much! This is great to know! In this case it is a SMLLC. Another question that arises is how to do this without piercing the corporate veil? Can I just pay the HELOC payments with my personal money and then make contributions to my personal account from the LLC?

@Pedro Morais I will defer pretty hard to all of the fantastic accountants and CPA's here on the site... I am just a realtor who is also an investor. I would imagine that are a lot of things you would need to look at with your personal situation from a tax perspective.