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Updated about 1 year ago on . Most recent reply
Which business entity?
Hello all,
I'm wondering what's better for tax benefits and over all for RE investors, LLC or S-CORP?Thanks!
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#1 Tax, SDIRAs & Cost Segregation Contributor
- Tax Accountant / Enrolled Agent
- Houston, TX
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#1 Tax, SDIRAs & Cost Segregation Contributor
- Tax Accountant / Enrolled Agent
- Houston, TX
There is no such choice. LLC is a legal entity that creates no tax benefits whatsoever and has no tax purpose. It is created for legal protection, and its effectiveness for legal protection is hotly debated. Search this forum for "LLC asset protection", and you will find dozens of threads.
S-corp is a tax election. You can ask your LLC to be taxed under S-corp rules. But you should not do that when you're starting, because S-corp election is only useful in very specific circumstances. In other situations, it can hurt more than help. Example: never use S-corps for rentals.
Short story: forget about business entities when you are just starting. Focus on making deals.