Tax Route - Partnership or S-Corp (Unique Case)

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Hello everyone! I've lurked a while but finally posting and getting involved. I want to preface I know this topic has been beaten to death. I've explored those threads and have been reading books, scouring other sites and materials to try to figure this out but I have not figured out the right path forward. With that said, here is the situation:

My Situation: 

We are purchasing a smaller ranch to demo and to develop a new construction. Say, hypothetically, the estimated profits from this project $300,000. All of this will be from real estate sales with a holding period of longer than a year, as the development and sale will last past 12 months.

My Dilemma: 

First, I understand this would normally be seen as "inventory," I was wondering if there's any way to classify this as capital gains? I have a friend who develops homes as well, but not in an LLC, and he submits his profits as capital gains. Has he just been submitting his taxes wrong the entire time?

Second, I am torn between following a partnership tax structure of S-corp. If the home can fall under capital gains, the partnership would make sense, as we'd distribute the profits and pay the 20% capital gains as the tax. 

On the other hand, if it doesn't classify as a capital gain, I'm unsure how this would pan out. I currently have a job with a salary of around $100,000 and my brother is unemployed. I mention this because I understand that social security tax would not be imposed past $128,400. So, under the partnership tax structure, I'd save 12.8% after the initial $28,400 income from the sale, right - would my incomes stack? My brother would pay 12.8% until he hit $128,400 as well. 

The other option is to go the S-corp route, where we'd pay one another, say $60,000 a piece. So, we'd pay normal income and self-employment taxes on $120,000, then $160,000 would avoid self-employment taxes.

My Thoughts:

In my mind, if the home can be classified as capital gains, the partnership structure is the route to go. If not, the S-corp is the right move.

With all that, what would be the right route to go? I really need some help with this and appreciate everyone reading this.

If the activities rise to the level of a trade or business and you/the entity are/is a dealer with respect to the mentioned properties, the income would not be capital gains but instead ordinary trade or business income subject to SE taxes.

I'd recommend you engage a professional to help make the decision (especially if you expect first year net to be $300k), as there are qualitative and quantitative factors that need to be considered.  Your individual facts, circumstances, goals, and exit strategy for this business need to be weighed.  You're not likely be able to make an information decision otherwise.