Re: Business Entities, Stage II - Posted by JHyre in Ohio
Posted by JHyre in Ohio on April 05, 1999 at 06:09:25:
From a tax standpoint, using a C-corp isn’t fatal or anything, I just don’t see much reason for it. If it’s the same corp that does your flipping, you’ve decreased the amount of flipping that can be done at 15% rates. Also, the corp is now conducting seperate businesses (flipping & management), making it a little harder to justify seperate corps down the road for other RE related businesses. If the C-corp is seperate from flipping business, I do not see much advantage either. No reinvestment at high rates of return is occuring, so there is no present value advantage from low rates to offset double-taxation and admin. Thus, I prefer LLC/S-corp as manager.
Tax-wise, I don’t think presence of trust changes anything for corp. I’ll have to double-check, because tax-treatment of trusts is not an area I deal with very often. My assumption is that you are using the trusts to preserve privacy.