If I form an LLC to hold a multi-family (I have not bought it yet) can't the LLC rent a residential unit to me? The LLC has its own tax number and is a separate legal entity. Let's use a $1000 rent as an example. I pay the $1000 rent to the LLC. If the cost of all overhead is 50%, $500 goes to overhead, is deductible and is not taxed. The remaining $500 is pass through income and I get it back, less income tax, say 22%, and self employment tax, 15.3%. So I get the $500 back less 37.3%. 37.3% = 153.65. I get $336.35 back in income from my own rent. It's also creates a unit with a stable tenant who is definitely going to pay the rent! If I had a tenant in there I would still pay income tax and self employment tax on the income and have to pay full price for a place to live as well. Long term, with mortgage rates so low, I am better off buying a place to live, but in the near term, it would work well. (One commercial lender I talked to does not allow owner occupancy. I have to find a lender who would allow it.) I do want to put property in an LLC to protect my assets.