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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3190
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I am looking at buying some rental property. I already plan

Customer Question

I am looking at buying some rental property. I already plan to have each property in its own LLC for liability reasons. My question is that if each property is its on LLC. can I form one company that owns the multiple LLCs for filing ONE tax return, to manage the money and have the insurance in the Main LLCs (Instead of multiple insurance policies in every LLC's name), and the one set of bank accounts in the Main LLC's name? Or does each of the LLCs have to be owned by me personally? **Please do not say to speak to a lawyer, I am on here for advice before speaking to a lawyer, not for a lawyer to tell me to speak to a lawyer**
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.
Welcome to Just Answer. My name is ***** ***** it will be my pleasure to assist you with your tax question today.
LLCs are disregarded entities for tax purposes, and the default entity status for a single member LLC is sole proprietorship, which means you report the rental activity on your personal tax return (1040). In other words, if you own 3 rental properties and for each you formed an LLC, you would include the income and expenses for each on your own personal tax return. Multiple tax returns are not required.
While you most certainly can form one LLC to own multiple rental properties, it is not advisable to do so. The reason is that you form a single LLC to hold title to your 3 investment properties and a disaster occurs on one of the properties, the creditor could reach all of the equity in all the assets owned by that limited liability company--all 3 properties.
The following links contain excellent information you will find helpful:
http://www.biggerpockets.com/renewsblog/2013/08/17/rental-properties-llc/
http://www.keytlaw.com/azllclaw/asset-protection/how-many-llcs/
Please let me know if I can assist you further.
Thank you and best regards,
Barb
Expert:  Barbara replied 1 year ago.
Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me.

Best regards,
Barb

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