From a tax point of view, both have income flow thru the entity to the owners. Thus, the entity itself is not taxable, except in odd situations and depending on state laws.
From a liability point of view, both take the liability off of you personally AS LONG AS YOU FOLLOW THE RULES. This means, in sophomoric terms, if there is a slip and fall at one of your properties, the best lawyer in the world can take your biz and properties for all their worth, but he can not touch your dog, jet ski, home, car, savings account, etc. We could go on for pages here, as this is the topic of a major portion of many college courses entitled Business Law or the Legal Environment of Business, or such. In a nutshell, we must treat the business as a business. Have a Board of Directors that has real meetings and shareholders meeting for the corp., take notes, publish minutes, treat owners as owners not as employees (although they may be that as well).
Accountants for the REI biz, generally see them as 6 of one, half a dozen of the other. Lawyers often the same, but ever so slightly prefer the LLC.
That said, I chose the S-Corp. Why? For me it was because I own another S-Corp and am familiar with the rules and the methods of keeping the corporate veil from being pierced. I did not want to learn a new game, even though they are very similar.
As always with these things consult your attorney and your accountant. I actually spoke with both by phone on the subject, prepared my questions & comments, then had a pow-wow with both at the same time in the same room to hash it all out. It the end, they just provided pro & cons. I had to decide what things I cared to protect the most and how I want to operate. Then I made the decision.
