All,
I encountered a situation where a lender stated that they would allow us to put a newly purchased house in the name of an LLC but not in the name of a subchapter S corp. I have a subchapter S corp but not an LLC.
Can someone explain why this migth be so?
Thanks,
dlb
.
Are you trying to buy the house in your S-Corp or QCD it??
purchase.
do an LLC and tax it as an S-corp. You get better liability protection from the LLC anyway.
When you do an LLC and tax it as an S-Corp what are a few of the benefits?
Are there any drawbacks to consider?
tax perspective they’re one and the same. an LLC taxed as S-corp IS an S-corp to the IRS.
However, consider this difference:
corporate stock is considered an “investment” and is available to satisfy judgement creditors. this means that when you rear-end someone in a pinto, they sue and you lose, that they can be granted your investment in S-corp stock. they now own the company that owns “your” property. you lose.
member interest in an LLC is considered personal property by statute. as such it is not available to satisfy judgement creditors. (they can, however, receive a charging order against LLC income; but you can easily frustrate that.)
Thus, while both the LLC and S-corp protect you from liabilities arising within the company, only the LLC protects the company from your personal liabilities.
that’s a significant difference.