Re: Multiple investors in a Corp.? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on July 09, 2002 at 08:21:08:
Using a closely held C-corp to hold properties is a no-no, because there is automatic double taxation at the highest possible rates (“personal holding company tax”). No similar levy applies for flips. The only tax issue that comes to mind, assuming that a corporation is appropriate for the investors tax circumstances, is that subsequent contributions of capital by investors is less flexible than with an LLC…generally, selling shares to investors is preferable to straight contributions of capital if contributions are to be non-pro rata, or not made by all of the shareholders. Also, I would consider forming an LLC and checking the box to be treated as a corporation…you are a corp for tax purposes, but an LLC with charging order protection (varies by state) for non-tax purposes.