All Forum Posts by: Joseph Palmiero

Distributing appreciated real estate from a S corporation will be treated like you sold the property and taxed. If you are selling the business assets vs. Selling the LLC, you could keep the s-corp to hold the real estate so that you don't trigger a taxable event.

I would setup a seperate LLC to keep your prior real estate affairs seperate from your deal with a partner.

Welcome Secunda! Congratulations on picking real estate as your strategy to achieve Financial Freedom.  I made the decision to invest in real estate over 20 years ago and it has been very good to me and my family.  Biggerpockets is a great place to start.  Good luck on your journey!

@David M. is correct, LLCs do not provide tax benefits.  Any costs you have before you do your first deal will be considered startup costs by the IRS.  The IRS will let you elect to write-off up to $5,000 in startup cost the year you do your first deal.  I hope this answers your question.

Is the LLC taxed as a corporation?

With a gain of that size I would definitely reach out to a tax professional to unpack your entire situation.  

One idea would be to harvest tax losses by selling any assets, like stock investments, that have decreased in value since you purchased them. 

For tax write-off purposes, there is no difference.

Generally your best strategy in your situation to save taxes (assuming the property will produce a tax loss) would be to covert it to a STR. To offset losses against your w-2 income, you will need to keep your average guest stay at 7 days or less and materially participate. To answer your question, I made several assumptions. Make sure you work with a real estate tax savvy tax professional to unpack your individual situation.