Living in an LLC-Owned House: Is It Possible?
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Yes, you can live in a house owned by your LLC. Whenever it pertains to assets and properties, investors usually try to get coverage by all means possible. This is a valid step, as it helps to offer protection against losses. A great option available here entails using an LLC. Thus, we have made this post on living in a house owned by your LLC.
Furthermore, an LLC combines merits obtainable with sole proprietorship, partnership, and corporation business structure. One of such merits is the distinction it creates between your business and private assets.
This separation also goes a long way to safeguard your assets from losses. Thus, we will enlighten you more on the merits of living in a house owned by your LLC, as well as the valid considerations to make. Come along.
Merits of Living in a House owned by your LLC
Some merits of living in a house owned by your LLC include:
1. More Privacy
When looking for a house to live in, privacy stands as a major pointer. By living in a house owned by your LLC, you enjoy a high degree of privacy. This is valid, as your name will not be present on the property documents. Rather, the name of the LLC will be visible. In this way, you can remain anonymous while living in the house.
2. Taxation advantages
Another merit of living in a house owned by your LLC is the taxation advantages it offers. With this, there are possibilities for selecting your taxation type. This can either be via business or personal tax. With this, you can plan your taxation activities in your favor.
3. Coverage of your asset
Upon living in a house your LLC owns, you further enjoy full asset coverage. This is valid because some issues may arise with the property, such as disputes with others. And if this results in a lawsuit, the LLC will offer you maximum protection. On the other hand, your private funds will be at risk if you are not under an LLC.
4. Ability to deduct your expenses and make depreciation claims
When you live in a house owned by your LLC, you can easily deduct the expenses you made on the property. This includes maintenance and taxation payments. Furthermore, you are at liberty to make depreciation claims regarding the house. Through this arrangement, you can fully make full payments for the house.
Valid Considerations to Make when Living in a House owned by your LLC
In addition to the merits of living in a house owned by your LLC, there are some valid considerations to make as well. This includes:
1. Adherence to state laws
State laws exist for those living in a house owned by their LLC. Thus, it’s best to obey these laws without defaulting. Some of these laws include the nature of documentation to get, as well as payments for permits. In all, you can avoid defaulting by adhering to these laws. Also, it would help if you did proper research regarding other laws in your state, as this will help you avoid any legal battles in the future.
2. Decide on the nature of usage you desire in the house
When living in a house owned by your LLC, you must decide on the nature of usage on the property. This can be either for investment or personal use. Making proper distinctions is essential, as different laws are applicable for each.
Furthermore, the nature of usage will also determine the type of tax scheme you belong to. You can seek advice from taxation experts to avoid defaulting.
3. Making reports regarding rental earnings
You are at liberty to rent out the house owned by your LLC. But on the other hand, you must also report your rental earnings. This is valid, as every state mandate homeowner to submit full reports regarding their rentals. To avoid having legal issues in the future, it’s best to keep up-to-date records.
4. Separate your financial dealings
Separating your financial dealings when living in a house owned by your LLC is also essential. This will help you to be up to date regarding the coverage you can enjoy under this arrangement.
You can easily achieve this by setting up distinct bank accounts for the dealings of your LLC and personal finances. With this, there will be little or no complications regarding your financial dealings in the future.
My Opinion
you can live in a house owned by your LLC, as highlighted above. Furthermore, this has some merits, as well as considerations to make. By taking the right steps and consulting with taxation experts, you will avoid all legal issues regarding the LLC.
References
- Bischoff, Bill; The advantages of owning real estate in a single-member LLC: https://www.marketwatch.com/story/the-advantages-of-owning-real-estate-in-a-single-member-llc-2017-05-01
- LLC Filing as a Corporation or Partnership; IRS. Internal Revenue Service: https://www.irs.gov/businesses/small-businesses-self-employed/llc-filing-as-a-corporation-or-partnership
I’m a driven and accomplished law graduate and post-graduate, passionate about sharing my legal expertise via my blog. I hold a Bachelor’s degree in Law from the University of London (UK) and a Master’s in Law from the University of Derby (UK). Both gave me the foundational knowledge and skills to excel in my chosen career path.
Throughout my academic journey, I have gained extensive knowledge in various fields of Law, including Corporate and Business Law in the USA, Criminal Law, International Law, US Copyright law, and most importantly, American Constitutional law.
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