Can you be a renter of the property your LLC owns?

9 Replies

Your LLC purchases a property fixes it up.

Can you become the renter of the LLC's fixed up property ?

I highly doubt it... for example if you were to rent the place and you own the LLC? I don’t think so. I’m sure others will chime in though.

I have been contemplating this also. I don't see why not, you own the company and will be renting to yourself but I could be wrong. You could also live in a unit and take it as a loss on your taxes possibly. 

@Pamela Baker just wondering, what would be the purpose of renting the property from your LLC? It sounds like you want to count the rent you would receive from yourself to your LLC as rental income for documentation purposes, like to secure a loan one or two years from now. I can tell you from experience that every time I've tried to count rental income on a loan application, the lender always asks for the lease. They will see your name on the lease as the renter. If you are considering renting from your LLC for that purpose, I don't think its going to have the results you may be expecting.

If for tax purposes (I'm not a tax professional) it wouldn't make sense to do it even if you could. Assuming your LLC is a single member LLC and you are claiming the rental income your receive from yourself as income so you could deduct expenses and depreciation for the property, you would basically be filing a tax return with your LLC name and would still have to account for the "rental income" received from yourself. In theory, you would be taxing your own money twice assuming you have W2 job--that is: you pay taxes on your income from your 9-5 job and then turn around and pay taxes on LLC's rental income that's actually your personal money that's already been taxed once.

In addition, I don't think the IRS rules would consider you "renting" from your own LLC as a legit situation. Not really seeing what you could stand to gain.

No you can't.

A single member LLC is just you as far as the IRS is concerned. You're just living in your own property. You can't rent your own house to yourself.

I'm not sure if this applies or if there is already a thread, so forgive me.

I just purchased a property from a Sheriffs auction and needed to create an LLC to do so.

I plan on rehabbing this property and living in it and then renting my current (primary) home. Should I or is there a way to place my current residence into said LLC?

Thank you!

Does your current residence have a lien/mortgage? That will make Putting it in an LLC challenging, if not impossible.

Rent the property out to a family relative if your goal is to have it be a rental so you can put it into operation as such if your trying to do fix up work in it.. you can rent it for a minimal amount, and then your free to work in it while they show occupancy,, Then you'll be able to take the cost of repairs as a deduction against the property,, Better for insurance as occupied is less expensive then vacant.. 

Yes! Thank you. Thats what  Im looking for.    Thank you for clarification.

It would void the whole legal point of having a LLC

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