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SE Tax With Rentals In An LLC

fixerflipper
2007-11-05 08:35

If I'm holding rental property in an LLC will the rental income always be exempt from self-employment taxes since it's passive income or does the very existence of an LLC imply business related activity? What about when I sell one of the rentals? Will it just be subject to capital gains or will it be considered business income ?


NewKidInTown3
2007-11-05 19:32

The character of the income does not change because of the LLC. Passive income is still passive, and, the sale profit from your rental is still a capital gain.


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