Living in rental that your LLC owns

5 Replies

Can a managing member of an LLC live in a rental that the LLC owns without paying rent? The positve cash flow on other properties within the LLC would cover all expenses on the rental they would live in. Also, how would taxes be handled at the end of the year since the rental shows no profit? Any thoughts or ideas would be helpful. Thanks!

Are you the only member in the LLC? If yes you can do whatever you like.

If no, are your partners ok with it?

Thanks for the information.

There might be something weird with taxis. I would check with your cpa as well. 

I certainly agree that it is possible to structure it in a way that part of your compensation or income (in comparison to the other LLC members) would be offset by the amount of rent. But what I believe James Wise was pointing out, it must be disclosed and agreed to by all members. This is typically structured and fleshed out in the operating agreement.

Also, why not pay yourself rent?  It makes your financials for the property look better.

The tax implications depend on the way that your LLC is set up. Are you an S-Corp or a C-Corp, a disregarded entity? Remember Tax Advice and Tax preparation are Tax Deductible! Talk to a CPA.

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