My dad has a couple rental properties and I just bought my first structure (multi-unit)
A few years ago, my dad put each of his rentals into a unique LLC to protect against the potential threat of personal injury or wrongdul death litigation or whatever else.
Should we be doing trusts instead?
Thank you
Should rental properties be in a trust to avoid multi-generational capital gains tax?
byu/NoNJPsYet inrealestateinvesting
Posted by NoNJPsYet
3 Comments
Trusts and LLC’s serve two different purposes and can be used together. Please consult competent counsel on the matter.
You typically want real estate to be included in a decedent’s estate to get a step up in basis. That doesn’t preclude a trust, but most tax planning that involves trusts is about getting property out of the decedent estate. There are asset protection structures that might be helpful, but they wouldn’t deliver an income tax benefit.
Can you elaborate on what kind of “multi-generational capital gains tax” you’re trying to avoid?
It does sound like you guys have enough invested that a professional would be a better fit over reddit ….
Talk to your attorney and accountant. Everyone has unique circumstances that could dictate what direction to go for different reasons. For instance, just having an llc isn’t auto-protection against those risks you mentioned. That’s not how it works, so if you REALLY want to protect from risk and taxes to the full extent possible, you need to speak to professionals that will review your situation.