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Should your painting business rent or own its building? Daniel Honan, CPA, breaks down the self-rental tax strategy: a separate real estate LLC buys the building, your painting company pays it the rent, and the check you already write every month builds your equity instead of somebody else's mortgage. He walks through how an SBA 504 loan can put you in a $2 million building for about $200,000 down, how a cost segregation study pulls depreciation into the early years instead of spreading it over 39 years, and why that big first-year deduction can get stuck as a passive loss while you still pay tax on the painting income. Then he explains the "dash four" grouping rule that may let the two companies be treated as one activity, why an 80/20 ownership split changes the answer, and why to plan the exit before you buy, not next April. This one is for painting business owners who are profitable, paying meaningful tax, and already need a warehouse or office.

Know Your Numbers & Save Big in Taxes,
Daniel Honan, CPA

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What We Discuss:
00:00 Should your painting business own its building?
01:11 Set up a separate real estate LLC
01:50 Financing with an SBA 504 loan
02:43 Cost segregation and depreciation
03:36 The passive loss problem
04:21 The dash four grouping rule
05:11 Ownership rules and the exit

Profitable Painter CPA – accounting and financial strategy for painting contractors. Visit us profitablepaintercpa.com

This episode was originally recorded as a video for YouTube.

If you hear me say things like “in this video” or reference visuals, don’t worry —
the content still works perfectly in audio form.

And if you ever want to watch the video version, you can find it on the
Profitable Painter YouTube channel.

https://www.youtube.com/@BookkeepingForPainters