Tax question - Small business LLC with S Corp
Tax Question fun!
If I self manage my properties but want to take advantage of the LLC S Corp designation for single-tier taxation, can I pay my small business to manage my property so that I only pay business income tax and not FICA tax on the rent that I'm using to manage the property?
- For example, say I get $600 of cash flow from rent (CF = rent - PITI). $150 of that goes toward property management fees (which I currently do myself), $200 goes toward future CapEx savings, and $250 is true cash flow. Can the $150 that I save for property management costs be paid to my LLC/S Corp so that I only pay business income tax and not the FICA taxes on that amount?
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#2 Real Estate Success Stories Contributor
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#2 Real Estate Success Stories Contributor
- CPA, CFP®, PFS
- FL
Good questions.
Rental income are not subject to SE taxes to begin with.
So that structure wouldn’t be required.
This would work if you had a business( not rental), and if you wanted to shield business income from SE taxes by funneling the income via s Corp.
- Ashish Acharya
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