Residential Rental - LLC - taxed as Scorp - Need assistance

[Raj Kumar]

I have few residential rental properties, for which me and my wife are on mortgage but did deed transfer to LLC. But as for filing taxes we elected as S-Corp, it's been few years we have this set up, but learned that it's not a good set up. I want to see how I can correct it, did anyone been through this path and got them corrected, what are the tax implications and what's the right way to get out of this structure and keep it simple, I'm fine just dissolving llc/scorp and just keep the properties on our name.

Please guide or provide CPA/attorney contacts who can help.

[Ashish Acharya]

Originally posted by @Raj Kumar:

I have few residential rental properties, for which me and my wife are on mortgage but did deed transfer to LLC. But as for filing taxes we elected as S-Corp, it's been few years we have this set up, but learned that it's not a good set up. I want to see how I can correct it, did anyone been through this path and got them corrected, what are the tax implications and what's the right way to get out of this structure and keep it simple, I'm fine just dissolving llc/scorp and just keep the properties on our name.

Please guide or provide CPA/attorney contacts who can help.

Just revoking the S-election is not going to solve your problems. The asset will be deemed sold at FMV when distributed out of the S-corp. That will create phantom income and you will pay taxes on that.

It is a little more complicated than his but you would need professional guidance.