Author Topic: Solo 401k for rental income? How do I shelter this?  (Read 417 times)

Reddleman

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Solo 401k for rental income? How do I shelter this?
« on: February 11, 2018, 07:42:43 AM »
I'm already hitting my limits for contributions as an individual in my 403(b) and IRA.  I also have a few rental properties that will probably start to show income above depreciation this year, so I'd like to shelter/defer that since I don't need to take it as income at the moment.

Currently they're under my name and taxed as normal income.  I was thinking of putting them into an LLC but unsure how this would work. 

SeattleCPA

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Re: Solo 401k for rental income? How do I shelter this?
« Reply #1 on: February 12, 2018, 07:23:39 PM »
I'm already hitting my limits for contributions as an individual in my 403(b) and IRA.  I also have a few rental properties that will probably start to show income above depreciation this year, so I'd like to shelter/defer that since I don't need to take it as income at the moment.

Currently they're under my name and taxed as normal income.  I was thinking of putting them into an LLC but unsure how this would work.

Your rental properties themselves will shelter income if you can claim losses and so "use" the depreciation to shelter earned income:

https://evergreensmallbusiness.com/real-estate-vs-ira-and-401k-accounts-part-i/

P.S. Putting real estate into an LLC doesn't change the tax benefits.

Rich on Money

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Re: Solo 401k for rental income? How do I shelter this?
« Reply #2 on: February 16, 2018, 03:25:24 AM »
Putting them into an LLC will not change how the rental income is treated for tax purposes.  I bought houses inside my IRA, but's it's a little tricky.