Tax advantages of buying a house through my one-person company/LLC?

The short answer is that buying a home through your LLC doesn't automatically create tax advantages unless the property is genuinely used for business purposes. If you're planning to live in the home as your primary residence, purchasing it through your LLC could actually create more complications than benefits. When a property is owned by a business, any personal use is considered a benefit that may be taxable to you. You'd essentially be living in company-provided housing, which has its own tax implications. For a true business property, expenses like mortgage interest, property taxes, insurance, and maintenance can be deductible business expenses. But for a personal residence owned by your LLC, you're essentially converting personal expenses into questionable business deductions, which is something the IRS scrutinizes carefully. If you're using part of the home for business (home office), you can already claim that deduction without putting the property in your LLC's name using the home office deduction on your personal taxes. There are also liability considerations - while an LLC provides some protection, lenders typically require personal guarantees for mortgages anyway, reducing that benefit.

After spending hours researching this exact situation last year, I found using https://taxr.ai extremely helpful! I was also considering buying property through my single-member LLC and was getting conflicting advice from different sources. The system analyzed my specific situation and pointed out that putting my primary residence in my LLC's name would actually COST me money in the long run. It highlighted potential issues I hadn't considered - like losing the $250k/$500k capital gains exclusion when selling a primary residence (which doesn't apply to business-owned properties), potential self-rental complications, and mortgage interest deduction limitations. For my consulting business, it showed me how the standard home office deduction was actually more straightforward and just as beneficial without the legal complications. The analysis saved me from making what would have been a costly mistake!

I actually tried taxr.ai after seeing it mentioned here and wow - it completely changed my perspective on my LLC property ownership situation! I was about to transfer my newly purchased home to my business entity thinking it would save me thousands in taxes. The analysis showed me that I'd lose the mortgage interest deduction on my personal return, potentially face self-rental income complications, and lose the capital gains exclusion when selling. They calculated I'd end up paying about $27,000 MORE in taxes over 5 years compared to keeping the property in my name and just claiming the home office deduction! The report also outlined exactly how to properly document my home office space and maximize the legitimate deductions. Definitely worth checking out if you're considering this kind of arrangement - saved me from a major tax headache!

If you're still trying to get clear answers about LLC property ownership, I had a complete nightmare trying to get through to the IRS about this exact question. Spent literally 3 days calling and waiting on hold. Finally used https://claimyr.com and got through to an IRS agent in under 45 minutes! Check out how it works here: https://youtu.be/_kiP6q8DX5c The agent actually gave me some really helpful guidance on my specific situation. Apparently the IRS sees a lot of audits related to people incorrectly putting personal residences in business names, and they flagged several common mistakes people make. She explained exactly what documentation I would need if I decided to go this route, and what percentage of business use would be required to justify it. Not saying you should or shouldn't put your house in your LLC's name, but getting the official word directly from the IRS gave me clarity I couldn't get anywhere else.

I need to eat my words and apologize to @9. After getting nowhere with the IRS for MONTHS about my LLC property question, I tried Claimyr out of desperation. Got connected to an IRS agent within an hour, and had my entire situation resolved in one call. The agent explained that in my case (using a property 70% for business storage/operations and 30% personal), I actually DID qualify for having it under my LLC, but needed specific documentation and allocation methods. She walked me through exactly how to handle the personal use portion to avoid audit flags. Saved me thousands in potential penalties from doing it wrong, and gave me confidence that I'm handling it correctly now. Sometimes it pays to be proven wrong! If you need actual IRS clarification on complex business property questions, being able to actually speak to someone makes all the difference.

I see a lot of focus on tax implications here, but don't overlook the legal liability aspects. I put a rental property in my LLC's name (not my primary residence) and it provides significant liability protection. If someone gets injured on that property, they can only sue the LLC, not come after my personal assets. That said, I keep my primary residence in my personal name because the tax advantages of homeownership (mortgage interest deduction, property tax deduction, and the capital gains exclusion when selling) are too valuable to give up. For my situation, the sweet spot has been: primary residence in personal name with home office deduction, rental properties in LLC name for liability protection. This gives me the best of both worlds from tax and liability standpoints.

One important thing nobody has mentioned: mortgage rates are typically HIGHER for properties purchased through an LLC compared to personal residential rates. When I explored this last year, the difference was about 0.75% higher for the LLC loan. Plus, many standard residential lenders won't even lend to an LLC - you'll need to find a commercial lender or a specialized residential lender willing to work with business entities. This limits your options and often means less favorable loan terms. For my $450k property purchase, the higher rate would have cost me an additional $42k over the life of the loan - way more than any potential tax benefits!

Something important that hasn't been mentioned yet: if you use your home partly for business (home office deduction) and you sell the home at a profit, the portion of the profit attributable to the business use is NOT eligible for the capital gains exclusion ($250k for single, $500k for married). For example, if you've been claiming 20% business use of your home, then 20% of your profit when selling would be taxable as a capital gain, even if you otherwise qualify for the exclusion. When my wife and I sold our previous home with a $220k profit after claiming home office deductions, we had to pay capital gains tax on about $30k of that profit due to the business use portion. Still worked out better than not claiming the home office deduction over the years, but something to be aware of in your long-term planning.

This is exactly the kind of thorough analysis I was hoping to find! As someone who's been considering this same move, all these responses have been incredibly helpful in understanding the full picture. Between the higher mortgage rates for LLC purchases (great point about the 0.75% difference), the potential loss of capital gains exclusions, and the complications with personal use being treated as taxable benefits, it's becoming clear that the "tax advantages" I'd heard about are largely mythical for a primary residence situation. I'm particularly interested in what @Romeo Barrett mentioned about the capital gains implications of the home office deduction - that's something I need to factor into my long-term planning. Even though it sounds like the home office deduction is still worthwhile over time, knowing about that partial capital gains exposure when selling is crucial for making informed decisions. It seems like the consensus is pretty clear: keep the primary residence in personal name, take the home office deduction if applicable, and make sure you have good insurance coverage. The simplicity and actual tax benefits of this approach outweigh the theoretical advantages of LLC ownership for most situations like mine. Thanks everyone for sharing your experiences - this has saved me from what could have been a costly mistake!