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Why put a house in the name of a business?

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TNDemo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-26-04 11:53 AM
Original message
Why put a house in the name of a business?
About a year ago there was a house for sale near one of my friends. She told me she thought there was a divorce or something. I looked it up in the property tax records and it was registered to some kind of medical association. I drove by the house and there was a sold sign on top of the real estate sign, so I told her it was already sold. I was talking to the friend again this week and telling her how few houses were on the market and how sick I was getting of looking. She said she thought this same house might be up for sale soon that she had heard something about a divorce situation (again). I looked it up in the tax records again and it shows it never changed hands last year. The house was built in 2000 and that is when this medical association bought it.

Friend says she never sees anyone there (feels like Mrs. Cravitts but is up a lot with a bad shoulder/surgery and notices what is going on around the neighborhood). She said some nights there are no lights on all night and other nights there will be 2-3 lights on that stay on all night. There is a lawn service that comes and does the yard. She doesn't think anyone is even living there but who knows.

I have been toying with the idea of just calling these people and asking if they are interested in selling but there is no listing for this company in the phone book and there is nothing on the internet about them. When we had a business we did everything to keep our house out of the reaches of the business and had an LLC. I can't understand why it would be preferable to have a house in the business name. I can understand if a company has to buy it in order to transfer an employee but this was evidently not the case since it was bought new. Anybody have any idea what is going on with this?
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7th_Sephiroth Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-26-04 11:57 AM
Response to Original message
1. tax purposes
some people start up thier own buisnesses and essentially become thier own company for the tax breaks
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mongo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-26-04 12:39 PM
Response to Reply #1
2. If you had a reasonable business purpose to use the house
there are some advantages to having the business buy the house.

In reality most people buy property personally, then lease it to their business (at a profit).

But consider that every expense that I can charge to my company costs me less compared to purchasing it myself. It is a business expense, lowering my profit and business taxes. It doesn't come out of my pocket, so no income tax on it either. Now you have to use it in your business, but there are times when you will get a benefit from it too.

I guess if you used to house to put up visiting Doctors or held conferences or something it would be a business expense, but it would give you someplace nice to put up the in-laws too. (which I suppose there would be some "imputed income" on that if you bothered to report it, but you would still save $)

BTW - I'm not the tax expert in the family, so don't take any of this as advice!




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SW FL Dem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-26-04 04:03 PM
Response to Original message
3. usually for tax or liability purposes
many business owners put their personal assets in the corporation's name so they can write off the cost. It's legit as long as they actually use the asset in the conduct of their business and only write off the business use. Unfortunately, millions of taxpayers, including my Repub neighbors, write off the entire cost of their personal car leases, dinners, computer equipment, etc.
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