Mark Kohler explains how to set up an LLC to buy property and rent it to your S corporation, then use a special tax election and bonus depreciation to generate massive write-offs for your business.
For any of you out there owning an operational business s corporation. Let's say you want to buy a building, a warehouse, a shop, some storage units and you're going to use those in your business. Your business is going to be the tenant. Are you going to get some extra write offs in that structure? Absolutely. It's called a self rental. I want you to learn about the dash for election. When your business buys a property and rents it back to your business, that is a huge write off opportunity where you don't have to be a real estate professional and you can use bonus depreciation and get a huge write off. Now, structurally, how do you do it? You set up an LLC to buy that building and then that LLC rents it back to your business. Then you make a special election called the Dash 4 that says I'm the 100% owner of the operational business. I'm 100% owner of the storage unit and I'm going to rent it back to my business. And the IRS says okay, that's one economic unit. You're golden.
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