Moving real estate from S-corp to LLC

[Shannon Kiefhaber]

My family has a large portfolio of properties owned in an S-Corp (LLCs didn't exist when they started investing!) and we are now wanting to start transitioning ownership of the portfolio to the next generation. Our CPA has advised that it is more advantageous to hold RE in LLCs rather than continuing with the S-corp. To avoid incurring a large tax liability they have proposed a detailed entity restructure including a S-Corp inversion to tax partnership. Has anyone else ever dealt with this scenario? A simple solution is to divide ownership of the exiting S-Corp however then we are still left with all the assets held in an S-Corp which to my understanding is not as flexible as ownership in an LLC. Any advice from those who have done this transition before would be greatly appreciated!

[Michael Plaks]

@Shannon Kiefhaber

Your question cannot be answered without a thorough hour-long (at least) discussion of your business and your family's overall financial situation, current and future, as well as examining your tax returns and financials. 

Any other answer would be akin answering "should I stop my usual eating habits and switch to ____ diet?" 

Hopefully your CPA is competent in tax planning and real estate and knows your situation very well, so he advises you accordingly. If you're not sure, then it's worth 2nd and 3rd opinion, but not in an online forum.