C vs S Corp - Posted by Sheik


#1

Posted by Stacy (AZ) on December 01, 1998 at 10:15:48:

Read Bill Bronchick’s “Maximizing Profit” how-to article. C corp is best for flips.

Stacy


#2

C vs S Corp - Posted by Sheik

Posted by Sheik on December 01, 1998 at 09:43:10:

Which is the best way to go for flipping/Rehabbing???

Would appreciate some pros and cons.

Thanks
Sheik


#3

Re: C vs S Corp - Posted by Bronchick

Posted by Bronchick on December 01, 1998 at 10:17:37:

C vs. S corp is a tax election that depends on your personal tax situation. Generally speaking, I prefer C corp, because the profits do not flow through to your personal tax return. If they did, you would either pay cap gains rates (15-20%) or, if short term deals, 28% or more. In a c-corp, the first $50K of net profit is taxed at 15%. Thus, if you report a “flip” as ordinary income earned to the corp, your effective tax rate is lower than if you reported it through an S corp on your tax return.

Of course, this presumes you are making a profit and otherwise have other income on your personal tax return. It is best to review your personal situation with a CPA or other tax advisor.