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Juliet Hawthorn
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Looking for tax reduction strategies

Juliet Hawthorn
Posted

Scenario: I buy 3 properties in an LLC and the properties are rented with a net income of $30,000 a year.

I leave that money sitting in a bank in the name of the LLC. Each year I use the entire rental proceeds to reinvest into another property under the LLC, without paying myself anything. As I am continuing to reinvest in the business, would I still need to pay income tax on the $30,000?

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Wayne Brooks#1 Foreclosures Contributor
  • Real Estate Professional
  • West Palm Beach, FL
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Wayne Brooks#1 Foreclosures Contributor
  • Real Estate Professional
  • West Palm Beach, FL
Replied

Yes. You and the llc are the same, for tax purposes. Income is income...it doesn't matter if you don’t “take it out or spend it”.

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