Owning Investment Real Estate through Single Member LLCs


Over the years, Single Member LLCs (SMLLCs) have grown in popularity among investors and business owners because under the so-called check-the-box regulations, you can generally ignore the existence of a SMLLC for federal tax purposes.  When you choose to not treat a SMLLC as a corporation for federal income tax purposes, the entity is disregarded (i.e., it’s a “nothing” for federal income tax purposes).  The federal income tax treatment of a disregarded SMLLC is relatively simple because its activities are considered to be conducted directly by the SMLLC’s sole member (owner).  For instance, when an individual uses a disregarded SMLLC to own rental real estate, the rental activity is reported on Schedule E of Form 1040.  There is no need to file a separate federal income tax return for the […]