Owning commercial property in your own name or form an LLC?

[Lamancha]

DH and I are in the process of buying a business that includes real estate with a house that will be our primary residence.  The business is in a separate building on the property.  We are forming an s-corp for the business.  The business will pay rent monthly to cover the loan amount. (bought with an SBA loan)

Here is where we are having a problem.  Should we keep the property in our own names or form an LLC?  I'm getting conflicting opinions from several experts on which is better.  The main pro for forming an LLC I believe would be liability protection, and the pro for keeping it in our personal names would be capital gains taxes if/when we decide to sell.

I think when the experts can't agree, the best thing to do in turn to strangers on the internet.  haha

[PizzaSteve]

Seems like one for a good legal advisor.  Not sure I would rely on an internet discussion forum for that one.

[CareCPA]

From a tax perspective, the type of ownership for the commercial building (whether personal or LLC) will not affect the type of gain when you sell it. Either way, you'll deal with the mess of depreciation recapture and capital gains. If you're using the house as a personal residence, then I see no benefit to having it in an LLC (I do see some reasons not to).

If it is all one parcel, you may have a mess having the real estate in an entity while using a part of it for personal use. There would be some mildly-complicated cost segregating and self-rental going on.

Liability would be the main issue, in which case I always suggest a lawyer.