Solved: I set up an LLC for my rental property business. Can I set up retirement plan to help offset taxable gains?
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I set up an LLC for my rental property business. Can I set up retirement plan to help offset taxable gains?

I am the only partner and employee, and I dont take a salary since I simply own all the profits.
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I set up an LLC for my rental property business. Can I set up retirement plan to help offset taxable gains?

If you're a single owner LLC, the business defaults to be taxed as self-employed and all activity is treated at your personal level. The LLC is a disregarded entity for tax purposes and in the sole owner situation, it doesn't change anything for taxes. This means rental activity is reported on schedule E and a retirement plan activity is treated at your personal level, as it was before forming. 

If you are providing services or sales that you materially participate in, the net income from this activity is your earned income, flowing from the schedule C Self-employed business income and expenses. All of this is to your favor, as the LLC was created to make the rules simpler for people to follow and still be able to get the limited liability protection. 

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New Member

I set up an LLC for my rental property business. Can I set up retirement plan to help offset taxable gains?

If you're a single owner LLC, the business defaults to be taxed as self-employed and all activity is treated at your personal level. The LLC is a disregarded entity for tax purposes and in the sole owner situation, it doesn't change anything for taxes. This means rental activity is reported on schedule E and a retirement plan activity is treated at your personal level, as it was before forming. 

If you are providing services or sales that you materially participate in, the net income from this activity is your earned income, flowing from the schedule C Self-employed business income and expenses. All of this is to your favor, as the LLC was created to make the rules simpler for people to follow and still be able to get the limited liability protection. 

View solution in original post

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