Structure for purchase - partnership

[Damon Tyler]

I have asked two attorneys (that I have given work to) along with my CPA and can’t get a straight answer. Help. I need advice regarding entity structure. I would like it to be the safest and also the least costly as far as taxes. My next purchase is going to be a multi family (4 unit ~ not commercial yet) in upstate New York, however, others future purchases could be in other states (WI,FL). This purchase will be with a partner. I live in MA, one partner is in Ma and the other is in FL. My partners have an S Corp. registered in Florida state and they would like it (that S corp) to be a member of the new entity. If this were for flips I would set up an S corp ,however, we will be following a buy and hold strategy. I was planning to set up a Massachusetts LLC or LLP. If I created an LLP, I believe I could have the LLC (or S corp) be a member but I’m not sure if I can do that with an LLC, and I am unsure what the best structure may be to balance protection and taxes. Also not sure if a trust would be a good option. Any help is appreciated.

[Scott Wolf]

Hi @Damon Tyler from personal experience, I know an LLC can be a member of another LLC, and the legal counsel of my firm just informed me an S-Corp can be a member of an LLC as well. I would form an LLC to hold the property. The only issue (I think) would be for their tax liabilities.

Also, based on location and size, I'm assuming the purchase is well under the $1.5mm threshold for FinCen, so the SCorp members wouldn't have to reveal themselves, although I doubt they're trying to hide their identity like some foreign billionaire or something.