Sole proprietor, LLC or Corporation?

[Desiree Board]

Looking for some input...
I'm working on educating myself more when it comes to various tax benefits and trying to decide what would be the best route for me moving forward. Ideally I would like to have at least 1 LTR, 1 STR and then flip 1-2 houses a year. With that said I'm curious as to what would be the best business set up (sole, LLC or Corporation). I recently read a book that mentioned there being a lot of power and benefits of a personal corporation but I'm curious as to when a corporation is actually beneficial over the latter.

[Ashish Acharya]

@Desiree Board For your mix of long-term rentals (LTRs), short-term rentals (STRs), and house flipping, an LLC is ideal for liability protection and pass-through taxation. Rentals generate passive income, so an S-Corp offers no added tax benefit. For house flipping, consider an LLC taxed as an S-Corp to reduce self-employment taxes by taking a reasonable salary and the rest as distributions. Avoid C-Corps, as they incur double taxation.

Use LLCs for rentals and consider an S-Corp election for flips if income justifies the additional complexity.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.