Will using an LLC affect my taxes?

Ultimate Real Estate Investor Tax Guide »

No. A single-member LLC is always completely disregarded for federal tax purposes. So you won’t pay any more or less federal tax by putting a rental property in an LLC. It has no effect on whether you can use any tax strategies, including the STR loophole, or the types of deductions you can take.

Your LLC income and expenses “pass-through” to your personal taxes, so the resulting tax is the same whether you have an LLC or not. But depending on your state, there may be fees associated with the LLC, which can be substantial in some states (I’m looking at you, California!).

This article is part of The Ultimate Real Estate Investor Tax Guide.

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David Orr

I am a credentialed tax professional with a primary focus on tax preparation and advising for real estate investors. Have tax questions or want me to do your taxes? Contact us.

This article was written or updated in 2023 or 2024 and is current for the 2023 and 2024 tax years.

The information presented here is meant for guidance purposes only, and not as personal legal or tax advice.