All Forum Posts by: Jay R.

Quote from @Janet Behm:

Jay, 

EVERY REIs circumstances are different. I am not advising you.

I suspect you did not consult with your tax pro when you set up our LLC taxed as an S-Corp.

I highly encourage you to make that contact!

If you don't have a RE knowledgeable tax pro, I do advise you to look in your locale for a Certified Tax Coach. These folks use RE as their primary vehicle for tax strategy.

Hi @Janet Behm. Thank you for your feedback.  I didn't think it was appropriate to outline my entire circumstance in my initial question thus I tried to form my question as concisely as possible.  I operate an active real estate business under my LLC/S-corp.  This entity and tax structure allows me to reduce my SE Tax liability (as you already know).  I am beginning to invest in real estate (rental properties) and wanted to understand the benefits (or disadvantages) of holding title to a rental property under an SMLLC/Disregarded or as a LLC/Partnership.  I know there are disadvantages of holding property's title under an S-corp thus my question of whether I am allowed to have my LLC/S-corp be the other partner of the LLC/Partnership that holds title to the rental property.  Thanks again.

Hello BP! I have a SMLLC (single member LLC) that is currently setup to be Taxed as an S-Corp. I am the only Manager/Member. I wanted to form a new multi-member LLC Taxed as a Partnership. I understand it is perfectly legal for other entities to be "Partners/Members/Managers" in this new Partnership/LLC. BUT I was wondering if the IRS would allow me to use my SMLLC as my other "Partner" in this new Partnership/LLC? Technically speaking, I am the only "natural person" in both entities. Also, is there a tax benefit in structuring my entities this way? The asset protection benefit is that I can utilize Special Allocation strategies whereby, I, as a natural personal individual, would own less than 10% of this new Partnership/LLC and my SMLLC would own the remainder 90% thus the majority tax responsibility would flow through to the SMLLC.

Any thoughts from the professionals of BP is greatly appreciated!