Each property (or small portfolio) held in its own LLC to compartmentalize liability. Series LLCs and Wyoming holding-company structures are common patterns.
Entities & Tax
LLC (Limited Liability Company)
The default entity for holding rental property — liability protection with pass-through taxation.
More in Entities & Tax
- 1031 Exchange— IRS §1031 lets you defer capital gains tax when selling investment real estate and reinves…
- Qualified Intermediary (QI)— A neutral third party that holds 1031 exchange proceeds — required by the IRS.
- Cost Segregation Study— An engineering-based analysis that reclassifies parts of a building into shorter depreciat…
- Depreciation— The non-cash annual expense that lets you deduct the wear-and-tear of a rental building ag…
- Bonus Depreciation— A federal provision letting investors deduct a large percentage of qualifying property in …
- Depreciation Recapture— When you sell, the IRS 'recaptures' depreciation you claimed, taxing it at up to 25%.