A frequent question for tax pros is, “Can I put my primary residence in an LLC?” It is well known that owners holding rental real estate in a limited liability company want to ensure they’re receiving all their entitled benefits.
The problem is, simply placing a personal residence in an LLC does not change the fact that the residence is for personal use and not for business. If you’re hoping that using an LLC will help you gain tax advantages, the LLC might not be the right choice for the property.
The main purpose of an LLC is asset protection. Aside from this valuable benefit, many choose an LLC to hold their business activity. However, simply using an LLC for anything personal not only doesn’t provide additional tax benefits, but it may also cost you the available benefits for your home.
If, however, you’re thinking of locking in the tax advantages you currently have while converting your home to a rental, consider selling it to an entity you own before you make it available for rent.
To learn how to avoid losing tax breaks and gaining more, keep reading.