Posted by Vic on July 28, 2001 at 03:06:43:
I’m not an accountant, nor do I pretend to be an expert when it comes to the IRS, but…
if you do an LLC or a S-corp, and if you do enough of those deals, you will personally be labeled a dealer, which is not a good thing. If youre doing flips, from the IRS point of view, all of the income from the LLC & the S-corp pass through to you personally. Thus you could very well end up a dealer.
On the other hand, if you set up a C-corp, then you can specify that that will be your dealer corp & do all of your flips in it. This will keep you from personally being labeled a dealer.
So my advice, which came mostly from this board & Bronchick’s site, would be to use a C-corp for flips & LLC or S-Corp for rentals that you will keep longer than one year.