Corp. Question...
Does anyone have any suggestions regarding pros and cons of whether or not we should form a corporation to handle our rental property. By this I mean is it better for our tenants to make rent checks out to a corporation as opposed to making the checks directly to me or my husband. Are there any benefits tax wise or just simply to protect ourselves in the event of lawsuits by becoming a corporation.
Any and all advice is greatly appreciated or even a post that I can refer to.
Thanks Christine
Choice of entity depends on many factors, including your specific financial situation. CPAs and estate/tax attorneys are good people to talk to on stuff like this.
If your rental business is large and produces net income, you might consider the C-corp in order to pick up fringe benefits you can't get otherwise. However, it's generally preferred to have the property in a LLC and get pass-through taxation to your personal return. The creditor protection is about the same either way. You could also set up a management company, which could be a different type of entity than the entity owning the properties themselves.