Trust Vs LLC & S-Corp

[Brian Ellis]

Ive been trying to research the pros and cons of each. It is really confusing.

I spoke with my lawyer, and he suggests putting my rental property into a trust.

My goal is to buy and hold very long term (sell when it makes sense to my situation)

Which would benefit me more? Im concerned about protection and tax advantages. 

[Costin I.]

@Brian Ellis I'm not a lawyer, nor CPA, not this is legal advice - your due diligence is still required.

AFAIK, a trust is not providing liability protection - is just a layer of anonymity that is often employed with a legal entity (an LLC) as it is complementary to it. So, unless MA has a special treatment for trusts, I would not employ trusts for the rentals (not alone for sure, but together with an LLC).

You don't want to hold real estate in S-corp and C-corp - Owning Rentals in an S Corporation Might Be a Costly Mistake.

That leaves you with the LLC - and even here there are many things to be discussed (when to do it, how to do it, proper transfer to preserve title insurance chain, DOS, financing, management, distribution of properties per entity, insurance etc.).

The LLC is a legal concept, of no particular taxation benefit (you can have it as a disregarded entity for taxation, or taxed as a S-corp or C-corp). You can structure your asset protection strategy such way that you might be able to get some tax benefit depending on what you do in your real estate investing, like if you self manage, or do flips, but just for holding, no tax advantage.

Here is a diagram I put together from my learnings on the same path you are walking now