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Single member llc as a member of s corp and self directed 401k plan

Dekalb, IL |

i own real estate and a small separate business , i want to establish single owner llc ( for real estate ) , and than incorpaorate it as a member in s corp where i my self with my wife ( manager of ll ) will be the members . main purpose is to establish self directed 401k , to maximize the pretax savings and provide 2 veil coverage . is it doable in Illinois . ? which speciallity of the attorney should make the appointment . thanks

Attorney Answers 3


I moved your question to business law; however, you should speak with an attorney who has experience with both business/corporate matters and tax matters because the primary issues here will be tax-related.

My answer does not constitute legal advice and may not be relied upon by anyone for any purpose and does not constitute an attorney/client relationship or an offer to form such a relationship. This disclaimer is intended to be fully compliant with the requirements of Treasury Department Circular 230 and the terms thereof are fully incorporated by reference. If you wish to consult with me please contact me at dana@nytaxcounsel or visit my website at

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You ask if it is possible in Illinois to establish an LLC and designate it as a shareholder (you call it a "member") in an S-Corporation. The short answer is, an S-Corp. must have natural persons as its shareholders. However, an LLC can - and they often do - have an S-Corp as a member.

You also ask what kind of lawyer you should consult. I do not think it is necessary to consult a tax lawyer for the limited purpose you describe. Instead I believe you should find a competent business lawyer and bring in outside professionals to augment that lawyer's services.

The best corporate counsel are not only Attorneys but Quarterbacks (if you will) - they can see the big picture and bring additional professionals to bear as needed to meet the goals of their Client.

I have linked to some of the relevant sections of my website below. Feel free to take a look and contact our office if we can be of assistance. In any event, I hope that this information has been helpful and wish you the best.

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Jeffrey Anton Collins

Jeffrey Anton Collins


You should call someone like Hedayat, who knows the area of small corporate entity law.


I do agree with both previous answers. And I think that you should seek advice by starting with the overall results you're seeking to accomplish. Instead though, it seems that you are concentrating on implementing the vehicles you believe are necessary.

Like I said, I agree. You should get an attorney to quarterback this process for you.

Attorney J Anton Collins is a featured Criminal Tax Defense Attorney on Avvo. You may contact Attorney Collins directly at, or 866-340-5055, for more specific answers. This forum is merely for open, public discussion. Discussions in this open, online forum are not intended to create an attorney-client relationship. IRS CIRCULAR 230 DISCLOSURE NOTICE: IRS Circular 230 regulates written communications about federal tax matters between tax advisors and their clients. To the extent the preceding correspondence and/or any attachment is a written tax advice communication, it is not a full “covered opinion”. Accordingly, this advice is not intended and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS regarding the transaction or matters discussed herein. Each taxpayer should seek advice from an independent tax advisor with respect to any Federal tax issues, transactions or matters addressed, discussed or referenced herein based upon his, her or its particular circumstances.

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