Being an S-corp will get you out of the SE tax and still provide for single taxation and flow-through qualities like that of a partnership.

Choosing an S-Corp to hold rental property is probably the most expensive title holding vehicle due to the corporate taxation issues.

Just to put some of the pieces together....Short Answer:There is no difference in taxation of an LLC or a Corporation electing to be taxed under Subchapter S.

The big beneift of an LLC is flow-through taxation, which eliminates being taxes twice on the same income.

I think he also may have given me bad info about s-corp taxation (which I posted on another thread here).

If you do not pay yourself a reasonable salary for a repeated and ongoing active investments the IRS and State Revenue Agency may come after you.LLC’s are by default treated by the IRS as pass-through partnerships (or disregarded entities if a single member/owner), which means profits and losses flow right to the owners and are added on to their income to be taxed and are not taxed first at the company level (i.e. no double taxation).

But the real exercise is to anticipate taxation impacts.

Hi BP,

I have a question that I'm sure many of you can answer.

We purchased a home to rehab last year in an LLC. The rehab was completed last year, but the house did not sell by the end of 2011. If the house had so...

You can always set up another entity and treat those properties as “investments” (not inventory) if you would like to exchange to defer taxation.

Hi,I am trying to fully understand taxation of rental properties before I make my first purchase.