With only 8k of profit, can you claim it is not reasonable to pay more than $5,000 to the shareholder?"

Under yours, they still have passives' 25% equity share and the upfront acquisition fee despite destroying shareholder value.More power to leads who reap those fees, but if you're a passive in Lifestyles Unlimited &/or network w/ Brad Sumrok's students, those types of deals will look pretty unappealing.

On the subject of WB, I just read his new annual letter to shareholders and he made the point that America's GDP growth is not in question.

It becomes hard to prove to the IRS what is inventory and what isn't.If there is more than one shareholder of an LLC it is taxed as a partnership UNLESS you are in a community property state.You need to understand that an LLC DOES NOT EXIST as far as the IRS is concerned: http://www.biggerpockets.com/forums/12/topics/7605...You can flip in a C-corp or s-corp and then distribute the income or even loan from there.Personal Holding Company Tax (PHC Tax) is a 20% tax on a corporation that holds passive based income that GROSSES more than 60% of the income.C-corps have NO CAPITAL GAIN RATES.Here is a thread on Real Estate in a C-corp and trying to get it out: http://www.biggerpockets.com/forums/51/topics/1057...

Investors being the residents themselves theirfore (accredited; non accredited shareholders).

S-Corps must file their own tax returns regardless of the number of shareholders and are never considered a disregarded entity.  

What really got me about this is that we just sold about half of Hydro one to private shareholders, so the province really does not benefit in this way at all.

The shareholder then also pays taxes when the profits are distributed (the famous double taxation you've heard so much about).2.)

I am setting up an LLC, and he is planning on investing in my LLC as a minority shareholder from a separate LLC.

This property couldn't stay more than 50% full for retail at 15 sq ft.I told them I couldn't help them and office might be better for it given the poor locations and other negative factors.The REIT manager agreed with me but said they are bound to rent at a certain per sq ft due to shareholder agreements and operating guidelines.I asked if they would sell to me for less and he wished he could but all under one loan and they didn't want to bifurcate to sell off.They asked me if I wanted to try and lease it up and I politely declined.