Best Corporate Entity To Hold Raw Land
Anyone have an opinion on what type of entity I should use for holding 2 lots I am buying in an appreciating 2nd home area. I will likely be building a spec/custom on one of them in 6-12 months, but I may flip the other to a builder or end user .
I plan to use a 1031 to move into other properties when I sell these, but I want to be able maximize any deductions and minimize costs until then.
Thanks in advance
Peter
Your proposed investment intent is to develop property for resale and to flip. I suggest an S-Corp as your business entity.
Because your property flipping and real estate developer activities are an active income business, your properties are not eligible to participate in a 1031 exchange. The profits from your sales are ordinary income to your business, taxed at your ordinary income tax rate.
Just my opinion
Thanks. I was planning to hold one for appreciation, and forgot that building a spec house would show my intent was to develop.
Peter