Therefore, it might be helpful to know the LLC's federal income tax status...Generally, contributing and distributing property to a partnership does not have a tax effect.On the other hand, distributing property from a corporate tax entity, either S or C, would be a deemed sale.

Corporations do not give 1099s to other corporations.

You need to protect/maintain the corporate veil of the LLC otherwise there is no point. 

Corporations, for example, can have far more investors.

Generally, do not hold rental real estate in a C or S Corporation.

There are rules to follow for how you run the "company", and there are certain factors that might result in a judge piercing the corporate veil in a lawsuit.  

A few things to note as a foreign investor to begin investing in the US (if you don't want to go the $500K route you mention):Obtain a US-based LLCApply for an EIN (Employer Identification Number)Execute an operating agreement with partnersThe first 3 can all be done with the assistance of a company like Corporate Direct.

I have a realestate guru whom owns a large realestate corporation.

The easiest way to my layman's understanding to pierce your corporate veil is co-mingle. 

Or...put them in a Trust or if in a corporation, name relatives as officers with stock and keep the the ship going...Never heard of not being able to get cash out on properties because he owns too many..??