Mark Kohler breaks down two ways to hold rental properties: in an LLC owned by your Roth IRA for tax-free sales, or personally through a trust to claim depreciation and cost-segregation deductions. The best strategy uses both buckets to capture different tax advantages depending on the property type.
Chapters
Should I buy real estate inside my IRA or buy it in my own name? Now what would that look like in the trifecta? It would look like this. You might have an LLC that's owned by your Roth, your partner's Roth, your spouse or kids, and then you have another LLC that's owned by you, your trust. Okay, guess what? They both have pros and cons. I want you to buy property in both buckets. The bucket that you own personally is going to give you pass through losses and depreciation and cost segregation. Are you doing self rentals or Airbnbs or long term rentals or commercial rentals? I don't know what floats your boat. Buy rentals in your own name to get special tax benefits. But when you go to sell, you might pay tax unless you do a 1031 exchange. Oh, and watch out. If you make too much on that 1031 exchange, you might not be able to do it. Or I can come over on the other side. Is it? And. Or. And I buy rental properties inside my retirement account. So my Roth IRA is buying rentals and if I go to sell those properties, I'm going to pay zero tax.
