Renting primary residence to yourself

6 Replies

So I have a thought. My primary residence can I put in my business name and rent it to myself? This would be a huge tax advantage. Daz

Talk to a cpa or lawyer to confirm but I’m pretty sure you can. Business owners do that with cars all the time I don’t see why a rental would be treated any differently. The only thing to consider would be potentially violating any loan terms if you had them but that’s easily avoidable! Good luck!

@Dazrell Fleming , how are you incorporated? Because if it is a pass through entity then putting the house in your business will not make a difference? If you have a C-Corp you might be able to do it, but you would have to sell the house to your business and pay all the transfer fees and taxes associated with that. It usually does not make sense to do it.

@Edward B. thanks for the input I didn’t think of that. I’m incorporated so the C-Corp wouldn’t apply. I just figured since my other two units are rented out but I run the finances thru my business I could do the same for my primary residence. But now I’m guessing since my other rentals are in my name I may need to transfer those. 

Unit 1 I’ve been trying to figure out how to pull the equity out of the house. I owe 207k and it’s worth 305k.  So if I sell it to the business would I be able to potentially cash out?

Unit 2 is a new purchase that I paid cash for. I plan to refi cash out once the home is seasoned. I’m wondering could I sale it to the business?

Daz

Originally posted by @Dazrell Fleming :

@Edward B. thanks for the input I didn’t think of that. I’m incorporated so the C-Corp wouldn’t apply. I just figured since my other two units are rented out but I run the finances thru my business I could do the same for my primary residence. But now I’m guessing since my other rentals are in my name I may need to transfer those. 

Unit 1 I’ve been trying to figure out how to pull the equity out of the house. I owe 207k and it’s worth 305k.  So if I sell it to the business would I be able to potentially cash out?

Unit 2 is a new purchase that I paid cash for. I plan to refi cash out once the home is seasoned. I’m wondering could I sale it to the business?

Daz

 read this below and see if it helps:

https://www.biggerpockets.com/forums/61/topics/329...

also, you lose the mortgage interest deduction on your primary, and lose access to conventional financing and insurance and will have to convert to commercial rates which are higher for both. everything you sell to an LLC, this means higher commercial rates, which raise your expenses, not lower....

@Dazrell Fleming and you lose the ability to take advantage of the primary residence exclusion tax free.

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