Pay myself as a management company to reduce passive income

[David Rende]

I'm trying to figure out the best way to reduce my rental income. 

I considered a sole proprietorship management company but it just seemed that that wouldn't be legit - maybe it would but I wasn't sure. My other thought was to use an S-Corp which would at least be a legal separate entity but still allow pass through income. 

I'll put it this way in a hypothetical scenario.

Net Rental Income: 30,000

Expenses: 26000

Net: 4000 (I'd like to get this to $0)

Could I pay the S-Corp (or LLC) $4000 a year and deduct that as an expense. (I'd prefer to not do an LLC because it seem the fees in illinois are even higher than an S-Corp)

Any thoughts?

Dave

[Steve Rozenberg]

I think your better off talking with both a real estate attorney and CPA. 

If you create an entity that manages your assets you may now be governed by real estate laws applicable to PM companies in your state, which if you do not know and not familiar with could cause a whole new set of problems for you regarding fair housing / state regulated laws. I would do some homework before you made a decision solely to save on taxes