Real Estate Agent · Charlotte, NC · Member since 2017 · 35 posts · 18 votes
Tax and LLC Question: I am currently in the process of renovating an 850 SF condo in Greenville, SC. I will be living in it starting August 1. I am planning on getting a roommate for this place and treating it as a house hack. I am not very familiar with the laws surrounding having a tenant or the tax benefits of this. I am planning on living in this place for the next 6 months to a year MAX before moving to another live and flip where I plan to operate an Airbnb. I will then convert the condo into a full time rental unit.
Should I get a LLC for this unit right now and place the lease under the LLC? What are the advantages of this and what are the risks I am taking by doing this under the table (obviously I will still be reporting this on my taxes)? Am I ok to wait until I convert this condo into a full time rental property to get a LLC?
I am planning on using a lease document from BP for my first lease with the roommate.
Circle the wagons. Time to make a call to your Attorney, Insurance Agent, and Accountant.
The LLC is a wise strategy to limit your exposure to a law suit. At any time!
For taxes, live in the property 2 of 5 years for benefits of capital gains, it is considered a residence and you have the $250,000 (Single) $500k (married) exemption if you liquidate.
We advise against any "under the table"...not worth the risk!