Hello,

I have a question and was hoping someone who is knowledgeable about running businesses (especially S Corporations) might be able to give some advice. My wife and I are both retired and own an S Corp from when I used to work as a self-employed travel agent. We own several rental properties, none of which are under the S Corp though. But now we are considering hiring our son as an employee of the S Corp to help grow our rental investments. We are not sure if this is a good idea though because our S Corp was never used for anything involving real estate before.

To elaborate a bit, our son has been managing our rental properties for several years now (for free). He is a web developer but was laid off due to COVID-related cuts and has found it very difficult to find full-time work again. He proposed that we consider hiring him as an IT consultant/property manager to create a customized website, network, and payment portal for all our rental properties. He also plans on improving our online advertising and social media presence. We are not computer savvy at all, so having him use his skills to potentially grow our rental investments sounds very nice. We plan on paying him a portion of our rental income for his services. It won't be much money, but just enough to keep him employed for the time being.

The main issue we are unsure about is whether we can hire him as an employee through our S Corp for helping us with our personal rental investments. It would be preferable for him to be an employee rather than a freelancer. But since we own the properties ourselves and they are not under the S Corp, would this be a problem? As I’m retired now, the S Corp is not taking in any income and I was initially planning on closing it down. Would it perhaps be better to pay the S Corp for consulting fees, and then have the S Corp hire him as an employee? We are not very knowledgeable about business structures so any advice would be very welcome.

Thank you for reading this long post!

Bob