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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I bought some rental property with cash, can I structure the

Customer Question

I bought some rental property with cash, can I structure the loan payments back to my self interest free, till the principle is payed back. I have them under LLC.
Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.
If that is a single member LLC - for income tax purposes - it is a disregarded entity.So - you may provide a personal loan to the LLC - that is your choice - but would not be reflected on your tax return and will not affect your tax liability.However - it is not clear what exactly you are trying to achieve?
Expert:  Lev replied 6 months ago.
You can generally use Form 1040, Schedule E, Supplemental Income and Loss, to report income and expenses related to real estate rentals.https://www.irs.gov/pub/irs-pdf/f1040se.pdfYou will attach schedule E to your tax return (form 1040) - regardless of having an LLC.You will deduct some Rental ExpensesExamples of expenses that you may deduct from your total rental income include:DepreciationAllowances for exhaustion, wear and tear (including obsolescence) of property. You begin to depreciate your rental property when you place it in service. You can recover some or all of your original acquisition cost and the cost of improvements by using Form 4562, Depreciation and Amortization, (to report depreciation) beginning in the year your rental property is first placed in service, and beginning in any year you make improvements or add furnishings.Repair Costs – Expenditures made to keep your property in good working condition but do not add to the value of the property.Operating Expenses – Other expenditures necessary for the operation of the rental property, such as the salaries of employees or fees charged by independent contractors (groundkeepers, bookkeepers, accountants, attorneys, etc.) for services provided.You may structure a loan from you to the LLC - but that will not be reported on your tax return.The loan is not taxable income and when that loan is paid back - it is not deductible. So nothing to report..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.

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