Legal entities for home ownership

[SummitSeeker]

Potential first time buyer here. I'm curious, are there any legal constructs that allow one to own and live in real property that offer tax or liability advantages? For example is there a way to create "100 Cherry Lane, LLC" or something like it (Co-op, corp, etc) that would allow me to live in the house (as the owner of the legal entity) and get favorable tax/liability treatment?

Potential advantages I'm thinking:
- Depreciation deduction
- Sell the house indirectly by selling the legal entity, hopefully no excise tax
- Capital gains ramifications
- Other

Does anyone do this? If not why not?

[Racket]

I am not an expert on the subject, but I believe you have to own your house outright in order to quit claim it to an LLC a lender may give you permission to do so, but i doubt they will since they still want you to personally guarantee the note.

I don't believe that the IRS will let you rent it to yourself. I may be wrong here, but I used to own a vacation rental, and if I used it I was "supposed" to document the percentage I occupied it whether I paid rent to myself or not.

[Markor]

"Sell the house indirectly by selling the legal entity, hopefully no excise tax"

Love this thinking!

I passed on a house in part because it was owned by an LLC (which bought it at a foreclosure auction). The house had an oil tank the LLC was pretending didn't exist. If I bought the place and found that the tank was leaking they'd just fold up shop and start anew. Good for them, bad for me.

I too am interested in the pros and cons of buying a house via an LLC.