Collect rent under LLC even though property is under my name
Member since 2025 · 6 posts · 1 vote
Collect rent under LLC even though property is under my name
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Rental Property Investor · WI · Member since 2023 · 192 posts · 144 votes
1yI know it's not best practice but we do the same thing and we have 5 properties. We do all transactions and manage all money under the EIN number of our LLC. Business bank accounts, credit card accounts, etc.... Having said that our properties have traditional mortgages out in my wife and my name with our socials. Our bank told us they would struggle to give our business a mortgage when we purchased our first property. Now they have told us we just wouldn't be getting the best rates. We don't comingle funds between the two accounts. I haven't looked at transitioning the properties from us to our LLC for fear of the loan's getting called due. My bank assured me that they wouldn't do that. We have a great relationship with our local bank but we still haven't seen a point to make that change at this point.
14 Replies
- Rental Property Investor · WI · Member since 2023 · 192 posts · 144 votes1y
I know it's not best practice but we do the same thing and we have 5 properties. We do all transactions and manage all money under the EIN number of our LLC. Business bank accounts, credit card accounts, etc.... Having said that our properties have traditional mortgages out in my wife and my name with our socials. Our bank told us they would struggle to give our business a mortgage when we purchased our first property. Now they have told us we just wouldn't be getting the best rates. We don't comingle funds between the two accounts. I haven't looked at transitioning the properties from us to our LLC for fear of the loan's getting called due. My bank assured me that they wouldn't do that. We have a great relationship with our local bank but we still haven't seen a point to make that change at this point.
- Member since 2025 · 6 posts · 1 vote1y
Thanks Paul! This is what I am trying to do as well, separate all credit card expenses, collect rent, pay mortgage all through the LLC. I just wasn't sure if it would make taxes more complicated when I need to file. I know the bank doesn't necessarily care where the mortgage payments are coming from, but I am not sure how collecting rent through the LLC bank account will affect my personal finances.
- Member since 2023 · 1 post · 0 votes1y
I believe you have to move the properties into an S corp for the tax piece. Which most people advise against for various reasons. Check with your tax professional to see what makes most sense for your situation.
- Attorney · Las Vegas, NV · Member since 2025 · 69 posts · 91 votes1y
Hi Rodrigo,
If the property is still in your name, collecting rent directly through the LLC without a formal agreement could create complications. It's crucial to establish a clear separation between your personal finances and the LLC's operations.Ideally, transferring ownership of the property to the LLC offers the most robust asset protection. This strategy shields your personal assets from potential lawsuits or claims arising from the property.
If you decide to keep the property in your name, utilizing the LLC as a management company provides a layer of separation and professionalism. This approach involves creating a management agreement between you and the LLC, with the tenants paying rent directly to the LLC. From there, the LLC can handle property-related expenses and can retain a management fee for its services.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.- Member since 2025 · 6 posts · 1 vote1y
Quote from @Savannah Wallace:
Hi Rodrigo,
If the property is still in your name, collecting rent directly through the LLC without a formal agreement could create complications. It's crucial to establish a clear separation between your personal finances and the LLC's operations.Ideally, transferring ownership of the property to the LLC offers the most robust asset protection. This strategy shields your personal assets from potential lawsuits or claims arising from the property.
If you decide to keep the property in your name, utilizing the LLC as a management company provides a layer of separation and professionalism. This approach involves creating a management agreement between you and the LLC, with the tenants paying rent directly to the LLC. From there, the LLC can handle property-related expenses and can retain a management fee for its services.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.Hi Savannah, I don't plan to transfer the property right now to the LLC. Even if I create a formal agreement between myself and the LLC, will the LLC still have to file a tax return for rental income collected?
- Attorney · Las Vegas, NV · Member since 2025 · 69 posts · 91 votes1y
Quote from @Rodrigo Hernandez:
Quote from @Savannah Wallace:
Hi Rodrigo,
If the property is still in your name, collecting rent directly through the LLC without a formal agreement could create complications. It's crucial to establish a clear separation between your personal finances and the LLC's operations.Ideally, transferring ownership of the property to the LLC offers the most robust asset protection. This strategy shields your personal assets from potential lawsuits or claims arising from the property.
If you decide to keep the property in your name, utilizing the LLC as a management company provides a layer of separation and professionalism. This approach involves creating a management agreement between you and the LLC, with the tenants paying rent directly to the LLC. From there, the LLC can handle property-related expenses and can retain a management fee for its services.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.Hi Savannah, I don't plan to transfer the property right now to the LLC. Even if I create a formal agreement between myself and the LLC, will the LLC still have to file a tax return for rental income collected?
Hi Rodrigo,
It depends on how the LLC is being taxed. You mentioned it is a multi-member LLC, so it is likely taxed as a partnership. If there is income to the LLC, you will have to file a partnership tax return (Form 1065) for the LLC to report the income and expenses. 1065 returns are due annually by March 15th.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
If the property is in your name then your LLC is acting as a property manager or payment processor which both require licensing - throw in most likely commingling funds as well and you may have a mess on your hands
7e investments53 Reviews - Realtor · Anchorage, AK · Member since 2019 · 20 posts · 11 votes1y
Quote from @Rodrigo Hernandez:
Hi all,
I'm looking for some guidance here as I have a property that's under my name and a multi-partner LLC with friends. We have a business bank account for the LLC and I want to begin collecting rent and paying the mortgage with that bank account to keep my personal finances separately. Are there any tax consequences or restrictions in doing so? Thank you in advance for your help.
Hi Rodrigo,
I actually do this with my rentals. Per my CPA, we set our LLC up as jointly owned disregarded entity through the IRS and received an EIN number. This allows everything to run through your personal return.
We collect rents and pay mortgages directly from our business checking account. Pay all utilities, contractors, and other bills through this account. Income and expense are tracked through an online accounting platform and we submit the tax forms from the platform.
When I created the LLC, we set it up as a real estate rental business. You do not need any professional licensing to manage your own properties. If your looking to manage other landlords properties through this LLC, you will need to get licensed as a real estate sales professional and follow your state/municipality laws and regulations. (however, I would never manage others through my own property management company... just my opinion)
If you've set up your LLC as a partnership, you will not be designated as a disregarded entity and a seperate business tax return will need to be completed.
Noah
- Member since 2025 · 6 posts · 1 vote1yHi Noah, the LLC is a Domestic LLC with multiple owners having a percentage of ownership in the LLC. How do we know if we will be categorized as a Disregarded Entity?
Quote from @Noah Loveless:
Quote from @Rodrigo Hernandez:
Hi all,
I'm looking for some guidance here as I have a property that's under my name and a multi-partner LLC with friends. We have a business bank account for the LLC and I want to begin collecting rent and paying the mortgage with that bank account to keep my personal finances separately. Are there any tax consequences or restrictions in doing so? Thank you in advance for your help.
Hi Rodrigo,
I actually do this with my rentals. Per my CPA, we set our LLC up as jointly owned disregarded entity through the IRS and received an EIN number. This allows everything to run through your personal return.
We collect rents and pay mortgages directly from our business checking account. Pay all utilities, contractors, and other bills through this account. Income and expense are tracked through an online accounting platform and we submit the tax forms from the platform.
When I created the LLC, we set it up as a real estate rental business. You do not need any professional licensing to manage your own properties. If your looking to manage other landlords properties through this LLC, you will need to get licensed as a real estate sales professional and follow your state/municipality laws and regulations. (however, I would never manage others through my own property management company... just my opinion)
If you've set up your LLC as a partnership, you will not be designated as a disregarded entity and a seperate business tax return will need to be completed.
Noah
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Your post isn't really clear:(
The property is in your name 100% or your name and the LLC?
If property in your name AND the LLC, then there are no issues, other than the type of tax return you'll need to file - probably a partnership return, but check with a tax professional.
If only in your name, then you would want a management contract between you and the LLC, making the LLC the property manager. If you are a partner in the LLC, then the LLC probably won't need a license to manage a property it doesn't own. Check your state statutes on this!
One other concern is who are you identifying as the owner & manager on the tenant's lease?
Many states require a lease to identify the owner, but allow the property management company to be identified as an Agent for the owner. This would legally direct the tenant to pay rent to the Agent, allow the Agent to evict, etc. Again, check your state statutes and consult with a real estate attorney.
Logical Property Management4.9458 Reviews - 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
@Rodrigo Hernandez Yes, there are a few important considerations. Since the property is titled in your personal name but you're planning to collect rent through an LLC bank account, the IRS still treats the rental income and expenses as yours personally—because ownership, not bank account activity, determines tax liability.
So, even if the LLC collects the rent and pays the mortgage, the income and deductions still flow to your personal return (Schedule E), not the LLC's, unless you formally transfer ownership to the LLC—which has legal and tax implications (like potential transfer taxes, mortgage due-on-sale clauses, etc.).
To avoid confusion or misreporting:- Keep clear documentation showing the LLC is acting as a property manager or agent on your behalf.
- Ensure the LLC doesn't claim the income on its own tax return if it doesn't legally own the property.
- Alternatively, consider forming a single-member LLC for liability and banking separation, which is disregarded for tax purposes, keeping reporting simple.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
INVESTOR FRIENDLY CPA®5241 Reviews- Member since 2025 · 6 posts · 1 vote1y
Quote from @Ashish Acharya:
@Rodrigo Hernandez Yes, there are a few important considerations. Since the property is titled in your personal name but you're planning to collect rent through an LLC bank account, the IRS still treats the rental income and expenses as yours personally—because ownership, not bank account activity, determines tax liability.
So, even if the LLC collects the rent and pays the mortgage, the income and deductions still flow to your personal return (Schedule E), not the LLC's, unless you formally transfer ownership to the LLC—which has legal and tax implications (like potential transfer taxes, mortgage due-on-sale clauses, etc.).
To avoid confusion or misreporting:- Keep clear documentation showing the LLC is acting as a property manager or agent on your behalf.
- Ensure the LLC doesn't claim the income on its own tax return if it doesn't legally own the property.
- Alternatively, consider forming a single-member LLC for liability and banking separation, which is disregarded for tax purposes, keeping reporting simple.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
Hi Ashish, if this is a multi-member LLC, would each person need to fill out a Schedule E?
- 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Quote from @Rodrigo Hernandez:
Quote from @Ashish Acharya:
@Rodrigo Hernandez Yes, there are a few important considerations. Since the property is titled in your personal name but you're planning to collect rent through an LLC bank account, the IRS still treats the rental income and expenses as yours personally—because ownership, not bank account activity, determines tax liability.
So, even if the LLC collects the rent and pays the mortgage, the income and deductions still flow to your personal return (Schedule E), not the LLC's, unless you formally transfer ownership to the LLC—which has legal and tax implications (like potential transfer taxes, mortgage due-on-sale clauses, etc.).
To avoid confusion or misreporting:- Keep clear documentation showing the LLC is acting as a property manager or agent on your behalf.
- Ensure the LLC doesn't claim the income on its own tax return if it doesn't legally own the property.
- Alternatively, consider forming a single-member LLC for liability and banking separation, which is disregarded for tax purposes, keeping reporting simple.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
Hi Ashish, if this is a multi-member LLC, would each person need to fill out a Schedule E?
@Rodrigo Hernandez If the property is titled in your personal name, you alone are the legal owner—even if the LLC is multi-member and helping collect rent or manage the property, the income and expenses still belong to you, not to the LLC or its members.
So, no, your LLC partners would not file a Schedule E for this property, because they don't have an ownership interest in it. Only you would report the income and expenses on your Schedule E. If you want the LLC members to share in ownership and income/tax responsibilities, the property would need to be legally transferred into the LLC, which comes with legal, tax, and potential mortgage implications.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.INVESTOR FRIENDLY CPA®5241 Reviews
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