Land owned by S corp

[oceanlovin'ea]

Client purchased land in April 2017. The land will be used to build a storage shed and possibly an office for the business eventually. But probably mostly for storage of materials.

They wrote a business check for it.

I am wondering about the wisdom in the land being owned by the S corporation. Would the client be better off to own the land personally. There is no benefit on the tax return for the land purchase. It is an asset. If and when they sell the land, are they better off with the land being owned by the S corp or by them personally.

Linda F

[kathyc2]

Client purchased land in April 2017. The land will be used to build a storage shed and possibly an office for the business eventually. But probably mostly for storage of materials.

They wrote a business check for it.

I am wondering about the wisdom in the land being owned by the S corporation. Would the client be better off to own the land personally. There is no benefit on the tax return for the land purchase. It is an asset. If and when they sell the land, are they better off with the land being owned by the S corp or by them personally.

Linda F

I don't see how it would make a difference for tax assuming it's a one person/couple S. Generally, owners will hold real property outside the S so that it is protected from legal or financial obligations of the S.

[BHoffman]

The trick will be getting the land out of the SCorp. An appreciating asset is better held in an LLC.

[oceanlovin'ea]

land title

The land is in the name of the individuals. But was purchased with check from business. But that is not a problem, the check would be considered a draw.

Linda