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Should I buy a house in my name or my company's?

Purchase a house under a company and rent it to yourself vs. purchase it personally

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Are there any tax advantages to purchasing a house under your company's name and then renting it to yourself vs. buying it outright as personal property? 

As a business, you can claim all the repairs as expenses and deduct them from your taxes, but I don't know if there are limits or disadvantages. What are the other pros and cons in terms of taxes? I am aware businesses can have properties in two different states.
 

 

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Sam Otto
By UncleSam
Aug 25th 2020 17:51

As with many things in the tax world this depends a lot on your specific situation which usually means actually talking with a CPA.

As a rule of thumb I would say it would be best and simpler for you (and your spouse if married) to own the home though it does somewhat depend on whether your business is a S-Corp and reported on your Schedule E or if your business is a sole-proprietor reported on a Schedule C.

If you are a S-Corp you do not want the business to own the house. What is instead a common practice is for the S-Corp to pay rent to the owner for a dedicated work space and then the owner can in turn write off the share of the property used for business purposes that is rented out to the S-Corp. This can help reduce your S-Corp income and offset sources of passive income.

If you are a sole proprietor you can already write off the business use of your home by filing IRS form 8829 and attaching to your Schedule C. However, if you do have a separate entity who owns the home, aside from yourself or the sole proprietor business, you can "rent" the space and in turn shift the money to your schedule E and this allows you to avoid self-employment tax. However, this needs to be structured properly as was laid out in the tax court case "[***] v Commissioner"

Lots more I can say but as I said in the beginning, you really need to call and talk with a CPA for your specific situation.

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