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Adam Wain, Real Estate Pro in Scottsdale, AZ

I have been asked the question from investors if having a rental property in an LLC will be advantageous when filing their schedule E?

Asked by Adam Wain, Scottsdale, AZ Wed Mar 9, 2011

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The reason I havemy properties in LLC's is not for tax benefits, rather for Asset Protection. It may cost you more when you file your taxes as you may have to file separate returns. Talk to your CPA. I am meeting with mine this week to make sure everything is squared away.
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1 vote Thank Flag Link Wed Mar 9, 2011
Agreed, let your CPA answer but most people structure their "company" as a LLC for liability reasons, not as a tax shelter. Still, speak with CPA and maybe consider reviewing the beneifits of such with an attorney as well.
0 votes Thank Flag Link Thu Mar 10, 2011
John that is a good point to check on. Our investors don't have a note as they paid for the properties with cash. They use the LLCs for protection as Jason stated.
0 votes Thank Flag Link Wed Mar 9, 2011
From a lending stand point I would not suggest advising a client to put there property into an LLC. I know people do it all the time, however if that file is ever audited the lender can call the note do. That's not to say they will but because you are a lender you want to make sure you are covered. Technically speaking your client would need permission from there current investor prior to making any changes to the way title is vested. You might want to make your client is aware of that fact if you have not done so already, they can confirm this by reading there deed of trust.
0 votes Thank Flag Link Wed Mar 9, 2011
Some investors have each property in its own LLC for liability reasons also. They need to discuss this with the CPA. Realtors are not qualified to answer these type of questions.
0 votes Thank Flag Link Wed Mar 9, 2011
Gotta go with Laura on this one.

This is a great question for a CPA to answer, not a real estate agent or broker. You even might want to consider advising your clients to check directly with their tax adviser, rather than your being the middle man.
0 votes Thank Flag Link Wed Mar 9, 2011
I have many investor clients that do have their homes in LLC however this is a great question for a CPA. I don't know if they frequent this site but if you'd like a referral to one let me know. As a Realtor we should not answer but can certainly direct you to the best source.
Laura Myers
Keller Williams
0 votes Thank Flag Link Wed Mar 9, 2011
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