One of my clients is going to start a residential house buy & sell business then eventually go into owning residential rentals. Plans to title each house to an LLC. Single member LLC so no P'Ship required but he wants to know if he elects S-Corp tax status, will that help his taxes. I am thinking probably not due to the rental business but I wanted to run this past you tax scholars.
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It will be a business subj to SE tax, and he will be a dealer, so its between a Sche C and Sub-S. You know the drill. -
At the point he is keeping rental property it is not a good idea to have them owned by a S-Corp.Originally posted by AZ-Tax View PostComment
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Its my understanding the S-Corp will not own property.
If my understanding property will not be titled to the S-Corp but title to the LLC. Is there an issue with him just filing a plain ole Schedule E?Originally posted by Gretel View PostComment
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I don't know what you mean by "issue". Your OP asked about electing S-Corp and this is why I said what I said.Originally posted by AZ-Tax View PostComment
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The way the original post was phrased, there is no S-Corp. There's only an LLC choosing to be taxed like an S-Corp - including all the well-known disadvantages of holding real estate inside a corporation. Just do a web search for "never hold real estate in a corporation". While C-corps are worse, you'll also find a good number of hits that address S-Corp treatment.Originally posted by AZ-Tax View Post
But if he keeps it as an SMLLC, without electing S-Corp treatment, then the LLC is disregarded for federal income tax purposes. There aren't enough details to know whether it would be Schedule E or Schedule C.Comment
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