Self-rental can be used for several strategic reasons:
Separating business operations from real estate ownership can protect the real estate from business liabilities.
Allows for more control over income allocation between entities.
Potential to optimize tax outcomes by leveraging different tax treatments for rental income and business income. This strategy allows owners to shift income from the business to themselves in the form of rental income, which can sometimes be taxed at a lower rate compared to business income. Additionally, rental income is not subject to self-employment tax, providing further tax savings.