llc vs s-corp

[Michael Maicad]

hi everyone! we need your help to choose the business entity that is appropriate to our goals in REI. my partner and i are focusing on multifamily home rentals with sec8. we are trying to build passive income and maybe do flips on the side in illinois where we reside. do you think we should incorporate our business name with LLC or S-corp?

[Lennie Holland]

I just read about this on one of the forums here. The general consensus seems to be you would want all your rental properties in a LLC.

Any flips you would want in a S-Corp, it seems the tax benefits for capital gains and Self employment tax are better in a S-Corp.

All the CPA's said not to have both rentals and flips in the same LLC or S-Corp. From what I was reading having both in the same entity was very problematic come tax time.

Maybe one of the many tax experts here will chime in to give a more detailed explanation. Good Luck