Michael HenningerCEO/Founder, Main Street CFO & Tax Advisors · Founder of Main Street CFO and Tax Advisors

The Friday BluePrint #construction #trades #cfoinsights

25 Sept 2026 · 1 min

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1:15

In this Friday BluePrint segment, the speaker recaps the recent Tax Tuesday discussion on self‑rental arrangements. He explains that when a business needs a building to lease, the optimal structure is to purchase the property in a stand‑alone LLC, which then rents the space to the operating entity. This separation shields the operating business from liability and avoids capital‑gains complications when the property appreciates and is later sold. He warns against placing the building in the operating S corporation, noting the risks of capital‑gains tax and exposure to lawsuits if an accident occurs on the premises. The speaker emphasizes that these considerations should be part of the decision‑making process and advises viewers to consult their attorney and tax advisor to ensure the structure aligns with their business goals. He invites questions and offers further assistance.

Chapters

This week's Tax Tuesday topic was a self-rental. And just as a summary, basically, if you have a business and you want to have a building that you want to rent from, you put— you buy a building in a separate LLC. The building rents the space from the, from the other LLC. It's a beautiful thing. There's a whole strategy involved there. So check out Tuesday's video. But what happens sometimes is that people will— they'll think they're doing something tax efficiently, but— and they'll buy a building in their, in their S corporation. Now, we Never tell people to do that. Causes a bunch of issues. Like if the building appreciates, you try to get it out, you're going to have capital gains issues. For liability's sake, now if something, God forbid, happens in the building, a customer comes by, falls, sues, now all the liability is in the operational business, right? Instead of if it was in its own LLC and that person tripped and fell, they only go after whatever's in that LLC. So these are the kind of things that you want to make sure that you incorporate in your decision process. So again, these are, we throw these things out there just to let you know that they exist and what kind of You know, things to avoid or whatever. But make sure that whatever you decide, you're talking to your attorney, you're talking to your tax advisor, and whatever decisions you make, they're aligned with the goals that you're trying to accomplish. So if you have any questions, we're always here. Hit me up. Talk soon.