Which is better; an S-Corporation or LLC a to invest, hold and manage real estate? by @R44D
Answer by Raad Ahmed:
People who want to invest in real estate are often concerned about how to move forward as either an S-Corporation or LLC. Much of that decision centers on tax breaks and how each entity can protect your bottom line.
Generally, an LLC is most ideal for a single person just because it is a simpler process. You will still have some protection from lawsuits, but any transaction will be taxed like regular income—this can certainly mean a considerable amount of your profit will go to taxes. However, an S-Corp will allow you pay yourself a salary and that will be taxed separately than the profits you make from selling a house. If you sell a house within a year of owning it, you will have some tax protection.
There really is no right or wrong answer. It simply comes down to how you want to protect your income as well as the surrounding legal issues that can come up in real estate. Everybody’s situation is unique and that is certainly something to weigh as you move forward.
Managing real estate can certainly be a complex endeavor. You may need the assistance of a real estate attorney. Need help deciding which solution is the best for your business? Turn tofor that. We’re helped 1000s of entrepreneurs connect with top-notch attorneys in a seamless and affordable way. Our site is easy to easy and our customer support is unmatched. Hope this helps.