How should my LLC manage and collect rent for personal properties

Question

Hello BP friends,

I have just started an LLC and want to use it to manage and collect rents from tenants in my properties that are owned in my personal name.  I need some accounting and legal insight on how to correctly do this to be sure that I am following the tax laws.  I use an online property management software that can collect rents online and deposit them directly into my LLC's account. BUT the properties they live in are still owned in my name.

Any info would greatly be appreciated.  Thanks!

Andy D. · Answer

Depends on what type of LLC you use. A single-member LLC is basically "you" with respect to taxes. An S-type and the likes are different and more involved as regards bookkeeping and certainly tax filing. So I don't really quite understand your question - you need some sort of bookkeeping either way...

Elliot Grochal · Answer

I have the exact same situation/question @Benjamin Mahan. For now I am keeping all money related to the property (rents, repairs, maintenance, etc.) in my LLC's separate bank account. I'm not sure how this will affect my tax returns for the better/worse though. Only advice I can give is to ask around to other local investors and see if they have an investor friendly CPA that can guide you in the right direction. That's my next step too.

Jeff B. · Answer

The issue would be to track and keep separate Personal from LLC.  The software doesn't matter, but you should be able to collect/report uniquely AND to have separate bank accounts for each.  btw: Quickbooks will facilitate this for you.