I bought rental properties in my name with the intention of deeding them to an LLC. I set up an S-Corp to manage the properties, like I learned in a seminar I attended. So now the management company is paying the mortgages, I’m receiving the 1099’s for the mortgage interest, the S-Corp pays me for office space in the home. Any comments about the tax treatment of all of this? Yes, I know about accountants, but I’ve done my own taxes for years and I believe with just a few questions answered I should be able to handle this.
You don’t use accountants just to do your tax returns. You also use accountants to see if your proposed investment plan will have any adverse repercussions.
If you had consulted an accountant before following the seminar guidance, I am sure the accountant would have told you all the pitfalls (tax and perhaps legal) of holding your rental property in a corporation that would be avoided by holding the propery in an LLC or even in your own name.
Then, if you still proceded with a corporate ownership strategy, it would have been an informed decision.