FL SMLLC > EIN > AS INDIVIDUAL OR CORPORATION

[Joshuam R.]

Hello all, will be continued full time W2 employee but also starting new LLC single member.

Next hour or so will register EIN with IRS, best selection I have found during discovery is to establish it as either 8832 or 2553 instead of individual/disregarded entity.

Between the two found that S-Corp may be the best route vs Corp since it is definitely considered Small Business.

I appreciate you sharing some color to this monochrome current position I am in.

Thank you all dear BPeers!

[Chris McCormack]

S-corp is not the strategy for holding property. A couple reasons why:

1. S-corps are limited to 100 shareholders. If you go the route of raising capital and investing in commercial real estate, you will be left disappointed when you can only get money from the first hundred people who commit.

2. S-corps have strict guidelines on taxable events. Specifically contribution of property and sales of interest are both taxable events within the s-corp. If you refinance a property or contribute another, it will trigger a taxable event which defeats the purpose of a refi.

3. S-corps are created to mitigate the self-employment tax that comes with LLC. You rarely see this with the ability to generate losses with real estate and therefore a loss in the s-corp would defeat its purpose AND restrict the amount that some of your owners could deduct.

Feel free to reach out to me directly with specific questions but it helps to know S-corp is not the move for holding property.