I had a thought about renting my current home to my LLC long term, is this a silly thing to do? Trying to come up with other avenues for revenue and just had a thought, are the cons going to seriously outweigh the pros here? If this is too vague I can try and go into more detail but just getting a rough idea if its been tried or if it's even worth it for the tax benefits?
I’m not a tax advisor however I would think the money you would pay rent with would be money you already paid tax on. When you rent it to your llc wouldn’t those same dollars be taxed again. If you sell now you get the exemption living there 2/5 years for capital gains but I would assume you loose that if you had to sell in a hurry. You get depreciation and write offs for capital expenditures but don’t forget recapture. I’m interested in what others say however if it were practical I would think we would all have jumped on this by now. That said I like the creativity and thinking out of the box.
I’m not a tax advisor however I would think the money you would pay rent with would be money you already paid tax on. When you rent it to your llc wouldn’t those same dollars be taxed again. If you sell now you get the exemption living there 2/5 years for capital gains but I would assume you loose that if you had to sell in a hurry. You get depreciation and write offs for capital expenditures but don’t forget recapture. I’m interested in what others say however if it were practical I would think we would all have jumped on this by now. That said I like the creativity and thinking out of the box.
@Jared Solomon, I don't think you can do that, and I'd suggest talking with your CPA. I'm sure there are other options out there that include corporations, etc. but my gut says that you're really stretching here and there isn't a benefit to what you're trying to do.