Mansion Global

Should I Buy Property Under My Name or Through an LLC?

Many buyers prefer purchasing through an LLC to stay anonymous

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erhui1979 / Getty Images
erhui1979 / Getty Images

Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.

Q: Should I buy property under my own name or through an LLC?

For foreign investors, said Edward Mermelstein, managing partner of the Manhattan law firm of Rheem, Bell & Mermelstein, the first step in making that decision is to determine whether the property is for personal use or strictly a passive investment. While an LLC is not necessary for personal use, it can be quite useful for purposes of anonymity, and many buyers prefer to purchase real estate through an LLC to maintain their privacy. LLCs, Mr. Mermelstein added, are typically recommended for investment properties to protect a buyer from personal liability.

Eric Dorsch, an attorney at Kozusko Harris Duncan in Washington, D.C., noted that purchasing U.S. real estate through an LLC does not provide any tax advantages in the United States. The owner of the LLC will be deemed to hold the property directly and will be taxed accordingly.

Email your questions to editors@mansionglobal.com. Check for answers weekly at www.mansionglobal.com.