Have you thought about whether creating an LLC for your rental properties would be a beneficial idea for managing them?
If you own rental property, creating an LLC to manage your properties can be a good way to protect your personal assets.
In the article linked below, real estate expert Ilyce Glink, author of “100 Questions Every First-Time Home Buyer Should Ask” answers questions about the financial benefits of a real estate LLC.
The excerpt below was originally published in The Washington Post on July 31, 2019, and was written by Ilyce Glink and Samuel J. Tamkin.
Q: My husband and I jointly bought a rental property this year with our son, who is 18 years old. He has started his own single-owner limited liability company. We are planning to move the property into the LLC so that he can use the rental income from the business for his college expenses.
What is the best way to do this so we avoid future gift taxes? The property cost $124,000. Will there be any tax implications for us if we move the property to our son’s LLC now vs. next year?
A: You’ve asked two separate questions.
The first has to do with the tax consequences of transferring ownership of the property to your son.
The second is whether your son should own the property in a limited liability company (LLC).
We’ll start with the LLC issue.
We know that most real estate investors hold their real estate holdings in one or more LLCs.
While these professionals handle their operations in this manner, it may not be the best way for your son to hold this investment.
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