Question For Owner Occupied Multi-Family
If I were to move into one of my multi-family properties, how is this going to work come tax-time?
Is all the work done on that property considered tax-deductible?
My LLC owns the property, but I personally live in it - should I pay my LLC rent? Can I just say that is my LLC's location and live there too?
I'm just trying to figure out the logistics of this, because I have a place I can live, and rent out the others and still stay in a cash flow position.
Thank you!
[addsig]
"it depends" IF you are living in one rent free then you could deduct on the work and repairs done on the others but not your own. If y ou pay rent to an LLC then your LLC could deduct it all.
THis would best be left to a CPA.
I however would not pay rent to the LLC as you would be paying an extra 15% in self employment taxes etc. LLC's are great to hold property in but suck as far as write offs and anything where you pull money out of them. IN most cases it is worth an S or C corp to "manage" the properties. I like an S because you can usually take all profit in capital gains for the first couple of years and then only pay a minimal amount to yourself and take the rest in capital gains.
[addsig]
Quote:
On 2004-05-21 10:34, Stockpro99 wrote:
"it depends" I however would not pay rent to the LLC as you would be paying an extra 15% in self employment taxes etc.
How does paying rent from me personally to the LLC induce the self emplyment tax of 15% etc??
[addsig]
I'm going thru this right now.
In CA w/o going commercial insurance, you can not get coverage if its LLC owned, but owner occupied.
They want a natural person on the insurance and the deed if Owner Occ. Still shopping this issue.
as to the rent to LLC def. check that out. 2 flags go up for me.
1) are you getting unfair benefit from the LLC and it compensation (ergos taxes)
2) are you "commingling" w/ the LLC, and my expose yourself to liability "piercing the corporate vail".
Thanks for some more clarification. Here is some more on that topic that was just answered for me. >> http://www.thecreativeinvestor.com/ViewTopic27903-23-4.html