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, appearing as the owner, rents the property to the LLC, appearing because the tenant, beneath particular phrases and circumstances, together with outlined lease funds.
Establishing any such landlord-tenant relationship can supply distinct benefits. It creates a authorized separation between private property and enterprise liabilities. Rental earnings generated can offset enterprise bills, probably impacting tax legal responsibility. Moreover, this association supplies 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 method, as laws can range relying on jurisdiction and particular person circumstances.