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Updated over 4 years ago on . Most recent reply
Passive Income Tax LLC
So I was reading an article where they were saying that money received from rental properties for example is considered passive income. My question is, if I have an LLC which I want to own my rental properties and the LLC gets taxed as an S-corp, would the money received from the LLC be considered passive or will it now be earned income?
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#2 Tax, SDIRAs & Cost Segregation Contributor
- CPA, CFP®, PFS
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Originally posted by @Diego Mishler:
So I was reading an article where they were saying that money received from rental properties for example is considered passive income. My question is, if I have an LLC which I want to own my rental properties and the LLC gets taxed as an S-corp, would the money received from the LLC be considered passive or will it now be earned income?
It would still be Passive unless you are a real estate professional and meet the other requirements such as material participation rules.
Also you might want to talk to a professional why you don’t want your rental in the S-Corp.
- Ashish Acharya
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