Do not put your home into an LLC #assetprotectionplanning

12 Jun 2023 · 1 min

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In this concise video, Jerry Taylor explains two major reasons why transferring a personal residence into a limited liability company (LLC) is ill‑advised. First, doing so can eliminate valuable tax benefits: the mortgage interest deduction and the capital‑gains exclusion that homeowners normally enjoy. Second, it can strip the homeowner of the homestead exemption, which in many states (e.g., Florida, Texas) shields the home’s full value from creditors and lawsuits. Taylor argues that while LLCs are suitable for rental properties, they are unsuitable for primary residences, and he recommends using a land trust as a more effective asset‑protection vehicle. The video ends with a call‑to‑action to visit his profile and sign up for his newsletter.

Chapters

There are two very important reasons why you do not want to put your home into a limited liability company. The first reason why you do not want to do that is for tax reasons. If you put your home into an LLC and you have a mortgage on it, you could lose your mortgage interest write-off. Another tax-related reason is that you could lose your capital gains tax deduction. You could totally lose that big tax break if the owner of your home is an LLC. LLCs work great for rental properties, but not for residences. Reason number 2, if you put your home into an LLC, you will lose the homestead exemption. That makes more difference in some states than others. Your homestead exemption protects your home from creditors and lawsuits, things of that nature, up to a certain amount. In states like Florida and Texas, it is total. The entire value of your home is protected. So for both of those reasons, you do not want to put your home into an LLC. A land trust is a better option. Now click on my profile, go to my link, and sign up for my newsletter.