Choose the Right Ownership Structure when Buying a Vacation Home
Tax Tip:
If you’re considering buying a vacation home, it’s critical to choose the right ownership structure. Your choices include a corporation, a trust, tenants in common or a limited liability company (LLC). While each structure has pros and cons, an LLC can be highly beneficial.
For example, using an LLC structure can limit (subject to certain exceptions) family members’ exposure to personal liability lawsuits associated with the property. This is especially important if you plan to rent the home when the family isn’t using it.
In addition, choosing an LLC structure for a vacation home can help simplify recordkeeping. The LLC is its own separate entity. So, all the operating funds for the home could be held in one account, making it easy to allocate the income and expenses between the LLC members.
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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