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Originally Posted by dqtommy
My wife and I bought a franchise business and also bought the land and building. The franchise and the land and building are all under the same LLC. We have been told we should be making the franchise pay us rent every month.... Somehow this will make us pay less taxes at the end of the year. Can someone please explain this? And for us to do this do I need to put the land and building in my personal name? Otherwise the LLC would be paying itself rent? Please help
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Basically it's an accounting trick that will help you cut your taxes. You are renting out your land to your business. That way your LLC can claim it as business expense, so the business will ended up paying less taxes.
I would consult an accountant, most of the people on this forum aren't accountants, so could give you false info.