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Level 2

What are advantages / disadvantages of putting your primary home in to LLC

WA state where homestead exemption is $125000.

 

Now if someone owns a single family house worth $220000 and worried about potential lawsuit.

He is considering putting this home in to a LLC.

 

Can someone explain what are the advantages and disadvantages? and answer my questions below?

 

1. I found that it provides protection against liabilities but if this person does not have any other significant assets other than this house - there is not much advantage on this point correct?

 

2. What about the tax benefits? He is not renting at the moment ...so are there any other tax advantages if he put in to LLC?

 

3.if home is put in LLC ..does he loose homestead exemption?

 

4. are there any tax advantages if he sells through LLC ?

also  are there any tax advantages if he gifts this property to a family member ?

 

1 Reply
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Level 15

What are advantages / disadvantages of putting your primary home in to LLC

There is no tax benefits to putting a personal residence into an LLC since this is a personal and not a business asset ...  and I don't think you can ... this is really a legal asset protection question and you should be discussing this with a local attorney ... putting it into a trust may be what you need to do but talk to an attorney.