Hi Steve,Here is some info you may find useful:https://www.entrepreneur.com/encyclopedia/sole-pro...https://www.entrepreneur.com/encyclopedia/limited-...When I was researching forming my real estate company, I could not find any "Pros" to being a sole Proprietor (either tax advantages, or protection from liability).

The bottom line is you gain more control, reduce the risk and most likely get better returns.Since you are self-employed, in addition to a self-directed IRA you should also explore the option of self-directed Solo 401k plan, which is designed specifically for small business owners or sole-proprietors.

In my case, as a Sole Proprietor, my rental is 'passive' activity.

It can, however, shelter some income in the form of dividends, as stated above.Legal/Entity/Protection Vehicles:CorporationLimited Liability CompanyTax Reporting Methods:C-CorpS-CorpPartnershipSole Proprietor

You can run a "Company" as a sole proprietor where you and your business are the same legal and accounting wise.Taxes are very complicated and specific.

There really is not much to look at for a sole proprietor other than making sure you are abiding by your state laws on how you're doing business or allowed to do a transaction.

-In the above situation, would you be considered a sole proprietor by default?

I am also a licensed RE broker/sole proprietor in VA and have worked in sales and property management for 25 yrs.  

(bigger penalties if you file late) Generally in real estate an entity does not offer more tax deductions than you get by operating as a sole proprietor. 

Whether you have an LLC or are simply filing a Schedule C as a sole proprietor, you can deduct the expenses incurred in generating your wholesaling fees and this includes your marketing.