Should I buy/Rehab property with S-corp then purchase from it?

[Juan Contreras]

I will be filing as S-Corp soon in order to begin flipping business. I will be using a HELOC to fund purchases and repair costs. After rehabbing, I would like to keep/mortgage the homes as investments properties in a separate LLC. Should I use the pass through entity to write off the costs of repairs and use the other benefits of the S-Corp then sell it to my other LLC? Essentially, it would be a flip that I would buy.

[Teri Feeney Styers]

@Juan Contreras you need to address this to CPAs; but I have an S-Corp that I use for flipping. I also have a General Partnership for "holding". When you purchase a property the IRS looks at "intent". If it is your intention to ultimately hold a property then it doesn't qualify as a flip. You don't get to write off the rehab costs in a lump and then sell it to yourself.