Is it a bad idea to put rental real estate into a corporation?

[Rachael Beissel]

Hi BP community!

I am a super newbie, and am learning all about the real estate investing world. Recently, when reading Rich Dad Poor Dad, Robert says "My rich dad just played the game smart, and he did it through corporations- the biggest secret of the rich" ch. 4, and talks about what a corporation is, and the benefits/ protections offered by a corporation.

When listening to BP podcast episode 569, where David interviews Tom Wheelright, Tom says it is a bad idea to put rental RE into a corporation. However, doesn't go into anymore detail than that. 

Does anyone have any insight into these differing opinions? 

At this point in my RE investing, I am so small and local to my area, I don't see a corporation as something I'd be seriously looking into right now, anyway. Just curious, looking for some input, or feedback to this question. 

Thanks!

[Tanner Glenn]

From a taxation standpoint corporations are generally not real estate friendly. First, let me differentiate between a corporation and an LLC. LLC stands for Limited Liability Company. Many mistake the C in LLC as short for corporation but that is not the case.

LLCs can be partnerships or corporations for tax purposes. Partnerships are much less restrictive than corporations, particularly when dealing with real estate. I would recommend listening to that podcast episode again and really focus on the details laid out in that discussion. They did a great job tackling a very complex topic.