LLC Vs Corp
What is the best entity to use when setting up you REI business? I know many of you use LLC but it seems to me that a Corp. gives you more cushion when it comes to protecting yourself. Any advice is appreciated.
HI
I use an LLC because i'm the sole owner of the LLC. If you have partners I would reccommend to INC as an S-corp.
The PLUS is you are the sole owner of the LLC is you save on the tax filing every year. The LLC is just an extra thing your accountant or yourself has to fill out so you save money from your accountant and filing fees. If you had a S-Corp your accountant has to file a whole separate tax return for your S-corp versuses just a extra thing to fill out on your personal tax return.
As far as I know, you are protected well with an LLC and Real Estate Investing.
-STEIN
I wrote an article on this subject:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=452
Just read your article, frogger (while I'm watching the frogger episode of Seinfeld on TBS, as a matter of fact), and kudos on a very well-written and informative read. Yes, there are times when an LLC is more appropriate (in particular, RE buy-and-hold). And, of course, rental income is always exempt from self-employment (social security) tax, so in that case, it would be a nonissue with my Sub S argument. Great article! I recommend everyone give it a read. But for flipping, L/O, and most businesses, Sub S is my choice. I don't do buy-and-hold, but when I begin doing so, I will explore the LLC concept more in-depth. Thanks, frogger!
LLC has a better protection against lawsuits, how good is Corp S when it comes to liability if you are doing a little of rehab and some leasing aswell.
An S Corp is still a corporation--it's only taxed differently. As long as you operate in your official capacity, don't co-mingle funds (write corporate checks for dividends), keep your records, and sign all documents correctly, you are not personally liable.