Re: LLC - Posted by Kev (NC)
Posted by Kev (NC) on January 23, 1999 at 11:03:45:
I am also a CPA and I agree that forming 20 LLC would be cost prohibative. Illinois is one of the more expensive states.
You have a few options, all of which might be more attractive with land trusts, but talk to your attorney. (This would allow you to move the property to another entity by changing the beneficiary without much trouble.)
An S-Corp would work well for you if you are the only owner and therefore the only person receiving profits.
If you have multiple partners, the LLC is usually better because of the flexibility in allocating profits. You can use a different method for each property if necessary (“special allocations”). With an S-corp, profits must be allocated by using ownership percentage.
I would definitely avoid the C-Corp unless you have a “dealer status” issue and you plan to keep all profits in the corp (ie. no dividends).
My clients are evenly split with S-Corps and LLCs, but LLCs are becoming the more popular entity. I personally us an LLC for my properties - and I only use one LLC with multiple landtrusts.
I like Pat’s idea of a $1 million threshhold per entity.