I buy and renovate about 3-4 houses a year. Half I keep and rent and the other half I sell, depending on the potential cash flow. I see a lot of articles that recommend becoming a C corp but I don’t see a lot of details. I know there is certainly some liability coverage with the C Corp but I am really interested in tax avoidance. My CPA says there would be no benefit for me. Does anybody have a different opinion?
You are in the same decision drama that those of us who finally learned enough to realize why you must incorporate. Go to website www.123-incorporate.com or your secretary of states website to learn how to. Your CPA does not appear to be a real estate investor. There are many benefits tied to being incorporated. We live in a nation of laws and real estate is a big money business. Being sued and judgements are a part of doing business in America. Protect your home and your dreams from becoming cancelled. It’s easy to incorporate your business and you do not need an attorney to do so. Being that you rehab and rent; you will find that an LLC or S Corp will work best for you.
Your right. My CPA does not do any real estate investing. I have looked for one that does but haven’t had any luck yet. What I have read about s corp. is that they offer no liability coverage. If I understand it correctly, the S corp is tax entity but not a legal one. I am a part owner of a C corp that is not real estate related, so I am somewhat familiar with the concept. The allowable expenses like health coverage and retirement plans would not really benefit me, so I am not sure I see any tax advantage in incorporating. Thanks to everyone for the posts!