Owning a house under LLC, but no income (I live in it)

[ds632]

Hi all,

If I own a house under an LLC, but have no rental income (I live in it), do I have to file anything for it or would regular personal income tax be enough?

If I do have to file something, how would I indicate that on Turbo tax?

[Mike9241]

certain states impose taxes, franchise fees, etc on LLC's separate and apart from any personal income tax. 

nothing special to file because your home is owned by an LLC. 

[AliciaP1]

It depends on the ownership structure of the LLC.

If the LLC is a Single-Member LLC you do not report the personal use of the home as any type of business deduction.  If you hold a mortgage on it, you may enter the interest and property taxes as personal deductions.  

If the LLC is a Multi-Member LLC you have other tax-related situations regarding using the LLC asset as a personal asset and that would be handled through your K-1 received from the filing of the tax return for the LLC.

[Carl]

Understand that if the LLC is the named owner of the property on the property deed, then when you sell the property you very will may not qualify for the "2 of last 5 years" capital gains tax exemption on any gain realized from the sale.

[tagteam]

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@Carl wrote:

Understand that if the LLC is the named owner of the property on the property deed, then when you sell the property you very will may not qualify for the "2 of last 5 years" capital gains tax exemption....

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Provided the LLC is considered to be a disregarded entity for federal tax purposes, the fact that the property is held in the name of the LLC will not disqualify the property for failing to satisfy the 2-year ownership requirement, per Treas. Reg. §1.121-1(c)(3)(ii).

[Carl]

Basically, it depends on the individual circumstances. Moreso for a multi-member LLC.

[tagteam]

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@Carl wrote:

Basically, it depends on the individual circumstances. Moreso for a multi-member LLC.

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A multi-member LLC would not be considered to be disregarded for federal income tax purposes. 

However, a single-member LLC is disregarded and, therefore, would qualify for the 2 out of 5 year ownership requirement of Section 121.

You have to read the relevant treasury regulation (cited in my post above).