taxes on new partnership for wholesaling

[Jeni L.]

I'm setting up a new partnership for the purpose of wholesaling.  I want to make sure I'm structuring the business effectively for tax purposes.

New Wholesale Business:

• located in GA (LLCs are easy)
• 2 person partnership
• assignments and/or double closings only (no flips/holds)

I have other business interests so I will be high tax regardless.

• majority owner of S-corp for IT consulting
  • W2 for my "reasonable salary" plus shareholder distributions
• LLCs (and trusts, etc) pass through for owning rentals
• LLC pass through for rental property management
• LLC pass through for note holding

This wholesale partnership will be the sole source of income for my partner.

My primary concern is whether separate business entities prevent my rentals from becoming "inventory" when the partnership gets treated as a dealer.

It seems a basic S-corp is the way to go with regard to earned income to minimize SE tax.  I'm sure partner and I can figure out a salary schedule even though this venture is straight commission. Thoughts?

Thank you!