LLC vs. C Corp for Flipping? - Posted by Graydon Trusler

Real Estate Investing
1

Posted by Redline on February 14, 2002 at 22:58:06:

This doesn’t answer the question, as property flipped through an LLC or a corp is not “from you personally”.

RL

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LLC vs. C Corp for Flipping? - Posted by Graydon Trusler

Posted by Graydon Trusler on February 14, 2002 at 08:27:37:

I am trying to decide between setting up a C Corp vs. LLC for flipping. I have read a ton of posts and several books on the subject so far. I am aware of the necessity to do one or the other to isolate the dealer status issue, not to mention liability.

However, since the LLC is a pass through entity from an IRS standpoint, will the dealer status pass through as well? I don’t want anything I personally hold to be impacted by the dealer status.

Also, I would appreciate any other pros or cons for a C Corp or LLC that you have.

Thanks,
Graydon

3

Re: LLC vs. C Corp for Flipping? - Posted by richard

Posted by richard on February 15, 2002 at 01:27:15:

Graydon,

Here’s a few articles for you from the Legal Corner at this site:

  • “Passive Investor”, LLC’s, Corporation.
  • Corporation vs LLC.
  • Difference Between Dealer And An Investor.

Hope these help,
richard

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Re: LLC vs. C Corp for Flipping? - Posted by Rusty

Posted by Rusty on February 15, 2002 at 24:12:58:

Albert Aiello has some great tax info regarding RE investing. Check here or some of his other articles/books:

http://www.dealmakerscafe.com/articles/alcorps.html

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Re: LLC vs. C Corp for Flipping? - Posted by Aaron

Posted by Aaron on February 14, 2002 at 13:21:57:

I am not an attorney or accountant but I know that Ron LeGrand and his expert CPA George Yeiter (www.yeiter.com) suggest a corporation (Ron says C, George says C or S) and they both agree NOT to use an LLC. I can’t recall the exact reasons but there are several that have to do w/ how you receive the money (as you, not as the C or LLC) and taxes that the the IRS will charge if or when dealer status is assigned (it has something to do w/ FICA tax in C’s vs LLC’s). Like I said, I’m not an expert but I remember the just of the C vs LLC for flipping discussion and it was agreed… use a corporation (C or S) NOT an LLC.
PS. They suggested using an LLC for keepers.

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Re: LLC vs. C Corp for Flipping? - Posted by JimKC

Posted by JimKC on February 14, 2002 at 13:26:39:

Aaron is absolutely correct. Anything flipped less than 1 year (some say 2 years) should not be from you personally or your Trust personally, but from a Corporation.