What would be the impact of incorporating on my rentals?

3 Replies

Hi, new to the forum here and I am looking into incorporating my rentals under a single entity and I am wondering how this would affect passive losses that have accrued over time?  Anyone with personal experience or referrals to a professional would be greatly appreciated!

Thanks

Mike

Originally posted by @Michael Nugent :

Hi, new to the forum here and I am looking into incorporating my rentals under a single entity and I am wondering how this would affect passive losses that have accrued over time?  Anyone with personal experience or referrals to a professional would be greatly appreciated!

Thanks

Mike

 You would make Uncle Sam very happy with your much higher taxes. Talk to a CPA to see what is best for your situation. 

@Michael Nugent

If you're truly thinking about a corporation - then @Mike M. 's sarcasm was mostly justified.

However, I suspect that by "incorporating" you actually meant putting your properties inside an LLC. LLC is NOT the same as corporation. Putting property into an LLC creates no tax consequences - good or bad. It's done for legal protection purposes but not for taxes. In other words, no harm.

@Michael Nugent

If you put the properties into a LLC(Single member) you will retain the suspended passive activity losses that you accumulated over the years.

Basit Siddiqi, CPA

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