S-Corp Vs C-Corp FRehabs/Flips
I know this is a well covered topic but I have been having a very difficult time searching the archives to get some solid information. I know that I should be consulting my Tax advisor and attorney (and I am this week). But I need to obtain a further understanding of an S-Corp vs. C-Corp when it comes to flipping properties. Now from what I have been told the S-Corp is probably a better route because you can avoid double taxation. (Although you can also with a C-Corp just not as easier). Assuming my income is less than $250K would an S-Corp be better? I know the C-Corp offers more options for taxes (pension, life insurance, Tuition reimbursement.). But is a S-Corp easier to operate?
All comments are needed? Thanks…
It is my thoughts that a C Corp. is not an option you should even be considering. A C corp is the same type of business structure that the largest corporations have that are traded publicly on the DOW. A C Corp would also usually have thousands of investors. The S Corp is definately the way to go. You are protected from your personal assets and you get the benefit of tax's like you mentioned. An S-Corp is limited to 75 shareholders but from what I've read you shouldn't have to worry about that. Hope this helps. Good Luck
I used a C-corp for flipping properties, and I have no other shareholders or officers but myself. There are advantages and disadvantages depending on your needs. Talk to an attorney and a cpa who invests in real estate. I got my initial information from Bill Bronchick's book on Flipping and asked more questions from there. Good REI.
[ Edited by maiapapaya on Date 02/26/2004 ][ Edited by maiapapaya on Date 02/26/2004 ]
Talk with your CPA, but here's what I heard. A Sub chapter S corp is a flow through corporation. Meaning profits flow striaght to your personal tax return. Also an S may work well when off setting income that you may have from a regular job.
I think most people do is setup a LLC to hold and a S for flipping.
As a side note: A C corp is not just for big Multi million dollar companies.
So what is the difference between an LLC that elects to be taxed as an S-Corp and just filing as an S-Corp