All Forum Posts by: John Lee

Steven Hamilton II Yes. I agree. But what can you do when it was set up this way from the beginning.

@J Scott

@Steven Hamilton II

I agree.  However, I've been given mixed opinions from tax attorneys and EAs.

As you pointed out, when any distributions are made to the shareholders, a reasonable compensation must be made for running the corporation.

Steven Hamilton II I know this thread is few years old but I just had a question. What if s-corp holds a rental property and its only income is from the rent. 100% passive. Wouldn't there be no salary since there would be no participation of SH? If SHs want to take distribution, will they have to take the reasonable salary?

@Chris Mason

NP.  I was thinking that it might need to be a commercial loan too.  Probably with a personal guarantee. Thanks.

@Nicole A.

Yeah, I thought so too.  I explained this to the lender, I guess we will find out soon. Thanks.

@Chris Mason

Yes, I understand. However, most of the threads are about transferring the title to LLC after the closing. I am asking if anyone has done it at the closing.

So my brother and I are finally getting a rental property.

Loan is under way with our personal names. However, we wanted to put the title in LLC from the start instead of transferring it after the closing.

Has anyone else done it this way? will this work?  

@Dennis Craig I am also considering to hire a property management company for my rentals and I believe the technology is a must.  I would love to get some referrals if you don't mind.  Thanks. 

@Costin I.

I will check these links and also talk to a CPA before I do anything.

Thank you.

@Steven Hamilton II

Thank you for your input.  I will consider getting an appraisal.

@Joe Tomko

I guess these options will work but we really want to keep everything simple. Thank you for the recommendation.

I know, I know..holding a rental property in s-corp is generally a bad idea.  But it was done this way by my parents.

So my family members' s-corp holds a rental property.  And after researching for some time, I realized that it was a bad idea. 

How would you fix it to put it into a LLC?

Some details-LLC will have same members, loan will be paid off.

I briefly talked with a CPA and he suggested that we sell the property to a new LLC. done.

Is it going to be that simple?