Land Trust Taxes
I am considering using a land trust for each of my properties. Does anyone have any pros/ cons from ACTUAL use?
Currently all my properties are listed on Schedule E when my taxes are completed. Since a different land trust will own each property , will each land trust have to complete a Schedule E? Will the Trust have to file a different return, since it is not "owned" by me? It sounds like a tax nightmaire (or a CPA's dream). How are you land trust folks doing it?
A land trust, when used exclusively as a title holding device, should contain language that vests the operation and management of the rental property with the grantor. As such, you will not see any change in your tax treatment for each property. Continue to file Schedule E as before.
Remember that when you establish a land trust, title to your property is actually held by the trustee of your trust. It is important that your trust agreement clearly specifiy the powers of the trustee, and the powers that you will retain for yourself.
Consult your attorney for specific details.