I am in the process of setting up an LLC for my transactions. I am a single member, planning on doing rentals long term but currently mainly doing LO’s and co-op assignments to raise some cash for those deals. I know that flips and assignments get the double tax (SS tax on top of income tax) and such activities are best dealt with by an S corp. LLC’s I know are better for rentals. What is the best way to go starting out? Can you change status of your entity down the road? Set up 2 entities? What about LP’s. Any advice would be appreciated. Thank you.
What makes you think that? An LLC taxed as an s-corp would have the same tax treatment and there are ways to use a c-corp so that all profit from a sale is not taxed, while the proceeds are still available to the owners and employees.
Not necessarily. It depends on how much of the rental income and expense you want to report on your individual tax return.
Yes, but there are tax consequences that may make it painful. Best to do it one way from the start.
They are great if you are the only general partner and own nothing. They are pretty bad if you are the limited partner. They aren’t an entity I would use to operate a business, but they can be a great tool for estate planning and wealth transfer.
Owning in your own name is better than this set up. You get all the costs of an LLC without any of the benefits.