LLC and Taxation

General Real Estate Investing
1

Hi,
My CPA said that, as far as an LLC goes, there are absolutely no additional tax breaks/benefits that an LLC recieves when compared to an individual filing his or her returns. An individual rehabbing a property would be able to claim exactly the same things (tools,materials, ect) as an LLC would.
Also, The passive income I would receive as a landlord is taxed as much as I’m taxed on earned income I receive from a paycheck .

I always thought that passive income was not taxed as much? Must be from all those Robert Kiyosaki books…

-Dan

2

Your earned income is subject to income and employment taxes, passive income is only subject to income tax. Both are taxed at the same rate from an income tax perspective.

3

yep, in spite of what you hear on the “legalzoom dot com” commercials, incorporating will not “save you thousands.”

except for some advanced issues like defined benefit pension plans, all the typical deductions are the same.

BLL gotcha covered on the passive income facts.

4

Thanks guys…