Legal Question - For Those Who Have AirBNBs

[puppy]

(feel free to move if this should go someplace else)

Have a vacation home that I intend on moving to mixed-use (spend some time there personally, rent the rest of the year). Couple questions:

• Best to move into LLC and subsequently get a TaxID, move homeowners insurance/transfer policyholder to LLC, add any mixed-use policy addendum etc?
• Have a trust setup, just move property into trust, get enough mixed-dwelling insurance to cover my ass, not worry at all about LLC and use personal Tax ID etc?

Note - i have no idea what i'm talking about so any and all guidance appreciated.

 

[Willie99]

You would only move to an LLC to limit your "legal" exposure and protect your other assets. If you choose this path, make sure you do everything by the book in order to preserve your LLC status

Assuming a single member LLC, no impact on your tax return.

Another path is to make sure you have enough insurance including an umbrella policy on your properties.

Since you're looking at short-term rentals, I'm going to suggest your exposure is greater than the average, protecting and yourself in some manner is wise, but I'M NOT AN ATTORNEY

 

[puppy]

In terms of everything by the book, what would that entail?
Yes, single member LLC, I could create a basic operating agreement so that ownership of LLC is stated or my wishes upon death I suppose?

So in your estimation is an LLC even worth it if it's the only property I'll be doing this, the only asset that would be in the LLC, and I am the sole member?

 

[Willie99]

It's worth it if that's the path you choose to protect your other assets

The alternative would be adequate insurance, maybe a little extra, plus an umbrella insurance policy