Real Estate Syndication

[Nick Murray]

Hey all, 

I have an LLC and I was taking over a healthy sized real estate syndicate (Realty Shares) holding. I have the forms to fill out, so it becomes under my ownership but my debate is between doing it under my personal social or my EIN for my LLC and using it as an asset to the business. I am assuming that the dividends/payout would be classified as business earnings?

Relatively new, my vernacular may be off but am just looking for some guidance or pros/cons of each direction! Thank you all in advance

[Brian Serina]

Hi Nick, That is a good question for a cpa but I don't think you setting up an LLC matters especially if your LLC is a single member LLC since it will be considered a "disregarded entity". To be considered QBI I am pretty sure the source of the distributions have to be considered and the make-up of those distributions. If it is not QBI at the source, then I don't think you having an LLC would qualify for a QBID. A good CPA can get into the weeds with this one...All RS investment entities were set up as LLCs and the only time I was able to get a QBID was if Box 3 was checked on the K1 and certain qualifying thresholds and requirements were met.