R/E Investing and Corporations - Posted by ChrisG


#1

Posted by Bronchick on October 26, 1998 at 18:13:40:

Sure.


#2

R/E Investing and Corporations - Posted by ChrisG

Posted by ChrisG on October 19, 1998 at 08:04:57:

Hi all,

I’m looking at setting up an S-corp for RE investing. Can anyone tell if there is a certain income level in which an S-corp ends up paying more in taxes than a C-corp. I heard second hand through someone that after $100,000 you actually end up paying more taxes than a C-corp. Is this true?

Also are certain types of RE investments that will work better when doing it through a C-corp.

Thanks,

Chris


#3

Re: R/E Investing and Corporations - Posted by Bronchick

Posted by Bronchick on October 19, 1998 at 09:50:58:

This depends on the type of gains and your other income. Since income “flows” through to your tax return in an S-corp, you are taxed at personal rates. Thus, generally speaking a C-corp’s rates are lower up to $100,000 of income. However, S-corp permits cap gains to “flow” through, which may be beneficial, depending on the type of properties you are dealing in.

Generally speaking, a c-corp is better for “flipping” properties. Of course, you should review your personal income tax situation with your tax advisor before proceeding in either direction.


#4

Re: R/E Investing and Corporations - Posted by JimD (NC)

Posted by JimD (NC) on October 21, 1998 at 10:40:53:

OK. Maybe somebody can clear something up for me. Perhaps I just being thick or something, but I fail to see the benefit of an LLC over an S Corp for passive income. It seems to me that profit and loss from passive income flows through an S in the same way as it does an LLC and that having taken the LLC path, I give up the option of perpetual existence while gaining nothing in return. Couple that with the fact that (in NC, at least) the annual report fees for an LLC are ten times what they are for a corporation ($200 v $20) and I’m just not sure that an LLC is the way to go. Any comments?


#5

Re: R/E Investing and Corporations - Posted by Mr Donald (NORVA)

Posted by Mr Donald (NORVA) on October 19, 1998 at 11:19:18:

What, if any, are the benefits of using a Land Trust to “flip” properties? Would you then have the proceeds flow through to another Trust or Corporation, say in Nevada, and then offshore?

Mr Donald.
dlm@bellatlantic.net


#6

Re: R/E Flow-Through of S Corp - Posted by raelynn mitchell

Posted by raelynn mitchell on October 19, 1998 at 11:17:28:

Is it possible to set up an S Corp to flow through to a C-Corp? What are the advantages and/or disadvantages of such a situation if it is possible?

Thanx in advance.

raelynn


#7

Re: R/E Investing and Corporations - Posted by Bronchick

Posted by Bronchick on October 21, 1998 at 12:30:19:

2 or more member LLCs report as a partnership, so they have more flexibility. Also, they require less formalities than S corp and better asset protection.


#8

Re: R/E Flow-Through of S Corp - Posted by Bronchick

Posted by Bronchick on October 20, 1998 at 10:00:58:

No, an corporation cannot be a shareholder of an S corporation.

HOWEVER, the same result can be achieved by using an LLC with a corporate member.


#9

Re: R/E Flow-Through of S Corp - Posted by raelynn mitchell

Posted by raelynn mitchell on October 19, 1998 at 11:31:49:

Or would an LLC be a better tool for flow-through?

thanx again)

raelynn


#10

Re: R/E Flow-Through of S Corp - Posted by Bronchick

Posted by Bronchick on October 20, 1998 at 10:02:46:

Yes to a point; keep in mind that “flipping” an LLC may result in personal liability for self employment tax.


#11

4 Flowthrough, LLC=Way 2 Go, but…? - Posted by raelynn mitchell

Posted by raelynn mitchell on October 21, 1998 at 20:11:00:

Is it possible to have an LLC with ALL the members being one or more corporations?

Thanx once again.

raelynn