LLC

General Real Estate Investing
1

I would like to know how the banks work, i went to a couple of my banks and asked them if i can put my propeties in a LLC they came back to me and said no, what could the banks do if i went a changed title but left the loans in my personal name, i have never been late on a payment. Also if i set a an LLC would this save me on taxes, i am currently getting killed on Amt taxes is this cause by owning properties and if i put them in an LLC would i stay on taxes.

Thanks For all your help

2

An LLC is generally tax neutral. That is, your personal income tax return will show the same tax liability with or without the LLC.

Could you please clarify what investment property expenses you have that are disregarded for AMT purposes?

3

stay away from banks. all they do is “fill in the blanks”.

find a good lender who can finance directly to an LLC with a personal guarantee. any lender (bank) who can’t or won’t isn’t worth your time.

4

i am showing a loss of about 3k, on my realestate assets , but does the irs look at how much income is coming in and is that what they look at for amt ,

also i would love to find banks that would do bussiness with llc, but in the mean time with do i do with all the units i cuurently have.

thanks for your help

5

AMT calculations do not look at your rental income directly. Instead, the calculations look at certain expense items. For rental property, the only AMT item I am aware of that might affect AMT is the depreciation on your rental property. For AMT purposes, depreciation is calculated over a 39 year recovery period instead of the standard 27.5 years.

If this higher net AMT rental income puts you over the income threshhold where AMT comes into play, then it will still happen even if your property is held by your LLC.

By the way, for most rental property investors, the AMT will most likely be triggered by a large capital gain on the sale of an investment property.

6

Thanks for all your help

7
what could the banks do if i went a changed title but left the loans in my personal name,

they can call the loans due. when you can’t pay - they can foreclose on em.

don’t do that.

set up LLC, get the loans from other lenders who will loan to LLC with your pg and you sell the properties to the LLC…

your current lenders get paid and LLC owns the properties.

now if you’ve got 8 properties - how long have you owned them?

8

how would they look at the captail gains, if i sell it to a llc is it fully taxed , some of these proporties i own for 8 years cost is small, and is a llc only really set up for asset protection or does it really save you on taxes

thanks

9

Hi Everyone

I also have another question , i see that Dave said to depreciate my proporties over 39 years instead of 27.5, if i have been depreciating all of my proporties for the last 5 years at 27.5 how can i change it at this point and if so how do i go about this.

Thanks

10

I think you can take your personal property into LLC as your initila investment. Just like you take machine or truck into a company. You may want to talk to a CPA, I am in the same boat as you but I have read somewhere that it does not have to be a cash that you take as capital to LLC it can be a property or machine or a car.

DFW