Does an LLC Really Save You Money on Taxes?
Does forming an LLC automatically save a real estate investor money on taxes?
It’s a common misconception.
An LLC can be an important part of a real estate investor’s overall structure, but simply creating an LLC does not automatically lower the owner’s federal income-tax bill.
That’s because legal structure and federal tax treatment are not the same thing.
A single-member LLC may be disregarded for federal income-tax purposes, while other LLCs may be taxed differently depending on ownership and applicable elections.
And the letters “LLC” alone tell us very little about the investor’s overall tax situation. Holding long-term rentals, operating short-term rentals, and flipping properties are all real estate activities—but they can have very different tax considerations.
In this video, Lisa Marie Odeja, CPA, EA, former federal government auditor and advanced tax strategist, explains why tax planning should begin with the investor’s actual facts rather than simply the entity structure.
Is your current structure actually working with your tax strategy?
Schedule a Discovery Call with Pinnacle Financial Services to discuss your real estate activities, your goals, and whether our firm may be a good fit to work with you.
Schedule a Discovery Call: https://pinfin.cpa/book
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