Investing in an Equity Real Estate Syndication using an LLC

Investing in an Equity Real Estate Syndication using an LLC

Member since 2021 · 1 post · 0 votes

I have been investing in equity real estate syndications for about 5 years but have always invested using my personal name. I am aware that the distributions I receive quarterly are taxed at my marginal tax rate personally at the end of the year.

I am thinking of investing in my next syndication using my already established S-Corp LLC (I am an independent contractor physician) and having the distributions paid to the S-Corp LLC bank account. Since the profit distribution from my S-Corp LLC is not subject to payroll taxes, is this a good idea to invest using S-Corp LLC?
I also think the 20% deduction on income from the S-Corp LLC pass-through entity can make a difference in taxes?

Thanks in advance for your responses. 

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    5y

    I suppose a part of the question is if you would save much on payroll taxes with the S-corp.

    You may already be making above the social security base which leaves your tax savings as only the portion paid into Medicare.

    I would ask your CPA to confirm if it makes sense for you to do so.

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