Can you create an LLC / company to own your own home?

Question

Is it ok or is there any problem with forming an LLC for the purpose of owning your own house. For example you would live in the house (maybe pay rent or not) but the LLC would actually hold the title, pay the mortgage etc

Answer 1

You should check your state law.

Some states require LLC's to be a minimum of two people, otherwise it should be possible to create an LLC and put your house in its name.

I don't really see the purpose though. It wouldn't protect it if you filed for bankruptcy for instance. All it would really mean is if people Sued you about your house, the most you could lose was your house, which in any dispute of that nature you probably wouldn't lose more anyway

Answer 2

You can create an LLC to own your home but there are some major cons in doing this. First as the previous poster mentioned you will not get the tax deduction for the mortgage interest and the free capital gains on your primary residence (up to 500k if you are married after two years of residency). Also, since your LLC does not have a credit history your interest rate will be high. If it is an investment property then I would say yes if you wanted to buy properties and rent them out as a business. Also, since the LLC has no credit you should co-sign for the company to build the credit up. You should consult a knowledgeable acountant.

Answer 3

yes you could, but why would you?? you (the individual) would lose the tax break that an individual gets (mortgage interest, property taxes) and when you sold it you would have to do a 1031 exchange on the property.

If you formed a living trust and the trust owned the home, then you wouldn't lose any of the tax bennies and still have the probation protection in the event of death.