Leasing actual property owned personally to a restricted legal responsibility firm (LLC) owned by the identical particular person is a legally permissible technique typically employed for asset safety and potential tax benefits. This entails a proper settlement the place the person, performing as the owner, rents the property to the LLC, performing because the tenant, below particular phrases and circumstances, together with outlined hire funds.
Establishing this kind of landlord-tenant relationship can provide distinct benefits. It creates a authorized separation between private property and enterprise liabilities. Rental revenue generated can offset enterprise bills, doubtlessly impacting tax legal responsibility. Moreover, this association gives a documented enterprise expense for the LLC and permits for potential depreciation deductions. Cautious consideration of authorized and tax implications is essential earlier than implementing such a technique, as laws can differ relying on jurisdiction and particular person circumstances.