S Corps and Partnerships distribute "distributions" which generally speaking aren't taxable as long as the partner/member/shareholder has tax basis in excess of the distribution.The tax on Box 1 ordinary business income can't be deferred via IRC Sec 1400Z-2.

After the hotel dissolved, a corporation was put in its place, and there was a deed which was set onto the land to restrict any activity/business such as there was prior with the hotel in the early 1900's.The Dilemma:As soon as I put in an application for the Short-term rental permit, members (corporation shareholders) of the area had presented a part of my deed dating back to 1922 which states, "may not be used as a boarding house, or any mercantile or mechanical use".

This is business, where every party has the goal of shareholder value maximization and no one has the responsibility to look out for your best interests besides you. 2.

If you are going to be the only owner of the business then it's unlikely you'll trip some of the S Corp requirements (as many of them relate to who can be a shareholder and limitations on having multiple classes of securities) but make sure you understand them generally and confirm the restrictions fit within your business plan. 

Will conventional lenders do a refi with an LLC, LP, etc. if each of the individual shareholders also personally guarantee the loan?  

He has been very interested in getting his own rental properties, so I bought it and formed a company with the 2 of us as shareholders.

Also, investors in REITs are 'shareholders' as opposed to 'limited partners'.  

It is the C-Corporation that pays dividends to shareholders, not theS-Corporation.Cash paid to S-corporation shareholders, in general, is called a distribution.

Ordinary Income.It will pass It will flow through to the Form 1040 to Line 17.The LLC will default to be treated as a partnership as there is more than one shareholder UNLESS all parties agree to have the entity taxed as an S-corporation(Form 2553) or a C-corporation(Form 8832) as long as it is timely filed.

While you can use this tool to build the retirement plan (which will be a shareholder of the corporation), this really more about capitalizing the business and less about tax-sheltered gains for the retirement plan.Bottom line is you should get on the horn with a couple of experts in this field who can discuss what your real situation and goals are and make a recommendation.