Newbie RE active investor - LLC vs S-Corp
Thank you for your assistance. My wife and I are going into active real estate and she has a real estate license, so we plan to elect REP status for her. I am a high networth professional who makes only W-2 income so the passthrough deductions and active loss from our rental/real estate business will hopefully give me additional earnings as they will offset my (currently 40%) tax rate.
We structured a series LLC in Texas (we live in Texas) to hold the rental properties. Our CPA advised us to structure the entity so that it is taxed as an S-Corp, rather than a single member LLC or Partnership (1065). He advised that although the paperwork and filing requirements can be more onerous than a SMLLC or 1065, it will give us the benefits of passthrough depreciation/losses that we seek with real estate. I have never heard of this structuring before (and I do think my CPA is very capable), but I wanted to ask the opinions of the members here if any of you structured your rental property holding company as an S-Corp and whether there were regrets in doing so that I am yet to realize?
Thank you for your time.