Single-Member LLC to Hold Rentals

Consider forming a Single-Member LLC and transferring your rental properties to it. Benefit: Owning rentals creates the potential for legal liability. By transferring them to an LLC, you create a legal entity that will potentially offer you protection against lawsuits that could take your other assets, such as your home, savings, etc. Note: You can never escape liability for acts of personal negligence or willful intent. Also, you should not transfer property and debt to an LLC if the debt exceeds your depreciated cost in the asset. However, you can transfer just the property and retain the debt in your name, if your lender will permit this. You should contact your attorney regarding any legal questions related to formation or liability protection provided by an LLC.