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stacybrozek, Other/Just Looking in Houston, TX

Will purchasing a real estate and getting a title under the llc that helped me save money to do so, help me with taxes?

Asked by stacybrozek, Houston, TX Tue Nov 22, 2011

Registered architect providing such services looking to invest in real estate (also pursuing a RE licence). Can I use the income I made in 2011 to purchase a RE and avoid paying income taxes? Or will it only help me with the future depreciation?

Help the community by answering this question:


Best to confer all your questions to your CPA who prepares your tax returns.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sun Nov 27, 2011
Having set up and purchase real estate many times under an LLC, I can tell you that there is virtually no reason to do so and in fact it typically make your life more difficult when it comes to financing.

There are virtually no advantages in owning real estate under an LLC that other than some small level of protection should you be using it as investment property (i.e. renting it out). You will pay more in insurance, the same in taxes, more in finance fees etc. If you're concerned about limiting any liability for someone getting hurt while visiting or occupying the property it's much less expensive to simply buy an umbrella policy for an additional million or two.

The only way I know of of gaining any real benefits is to set up a full fledged corporation to own the property under and this can be expensive.

I would suggest having a conversation with your accountant about this and see what they suggest.

Best of luck to you.
0 votes Thank Flag Link Tue Nov 22, 2011
It is my understanding that an LLC passes through all tax benefits and liabilities just like it did not exist, but check with your CPA. Having said that, trying to arrange financing could be a problem with an LLC. We will not close a loan where title is being taken as an LLC. Others will tell you that is not a problem, take title in your name and then contribute the property to your LLC, technically that maneuver triggers the due on sale clause. Hope this keeps you out of trouble, good luck,
0 votes Thank Flag Link Tue Nov 22, 2011
Check with your CPA, but I dont think it helps you with taxes at all.
The reason most people do this is to potentially avoid liability.
You will also want to check with your lender to see if they will allow you to do this.
Many won't allow.
0 votes Thank Flag Link Tue Nov 22, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
This is a question for a CPA or real estate attorney. Many offer free 30 minute consults in your area...Google for RE Attorney with your zip code at the end.
0 votes Thank Flag Link Tue Nov 22, 2011
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