S- Corporations for rental property

Redlands, CA · Member since 2019 · 5 posts · 0 votes

Hi Guys,

I am new to this group. I have a couple rental properties and I was advised by my cpa to retitle them in my S-corp. He also wants my to have my rent paid to the S-Corp and start paying all of the bills for the rentals out of the S-corp Bank account. I like the idea of paying all of the expenses out the the Corp Bank account, but I am unclear why I should retitle the Properties in the corp name. Do you any of you guys us S-corps for you renetals? If so why and how? Thanks

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Natalie KolodijBusiness Member

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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes

You almost NEVER want Rentals in an S corp.

There is NO tax advantage, and often there can be a ton of negatives. I would recommend a new CPA over this advising.

The reason an S corp saves you money is by allowing a salary and in exchange we can reduce self employment taxes. But rentals already don't pay self employment tax.

Google "Why you shouldn't keep rentals in an S corp" and read the first page or articles on it there.

I know Tax pros who even refer to recommending the S corp for rentals malpractice.

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Scott Roy
Contractor · St. Louis, MO · Member since 2019 · 12 posts · 17 votes
6y
Originally posted by @Sylvia B.:

The S Corp files a tax return, but unlike a C Corp, does not pay taxes. That income is passed to the owners via the K-1.
Thanks! I don't know how I missed that S-Corps are pass through entities.
How Are S-Corps Taxed?

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