I am in real estate investing with a LLC already established. Our primary resident is in need of refinancing. For those being in real estate for so long , are there any benefits tax wise (Obviously my local CPA is looking into it) having my Business purchasing the primary residence and we renting from it ? My wife has a home base business and works from home ( So we have a home office for that ). I do understand that we should be consulting with a CPA. However, the one that i have seems to not see any benefits so i am running this by the community .
Not really, you pay rent to yourself so you essentially pay taxes on the rental income. In addition the interest rate on an LLC is higher then the interest rate on personal residence. You also need to claim depreciation on the property and if you sell you are not going to be able to exclude gains on the property so if you want to upsize down the road or move to another city you will need to do a 1031 exchange or pay taxes on the gain. A home office deduction may make sense. You are doing the right thing by talking to the CPA but make sure you are dealing with someone who has business and rental property experience.
Thank you Colleen . I decided to take my business to the next level; reason i have subscribed to the Pro Membership. It is already paying off :)
PS : i live in a small town here and nothing seems to be moving for availability in acquiring new properties. Contemplating a sub-warmer climate States (Currently in Wisconsin) for the next move with delegating management to propriety managers. I would appreciate some experiences from other Pro members already succeeding in that areas.