We recently purchased 2 investment properties (a townhouse and condo) that we plan on renting. Should we establish a formal business to manage these properties? If so, what are the differences between an LLC and an S-corp? (Note -- we live in Florida). Thank you
You really need to discuss this issue with a competent transaction attorney and, perhaps, even a tax professional. Your individual tax circumstances may greatly impact which you entity you use. You should seek legal and accounting advice as you state you have already purchased the properties which would tend to mean you are now seeking to transfer them to an entity yet to be created. This action may have tax implications in and of it self.
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You should establish an entity for this business. A professional can't answer the question of what entity to select for your business based on three sentences posted on the internet. It takes careful review of the business, the owners, the plans, and other circumstances. Speak with an accountant or an experienced business attorney.
This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.
While I agree with the previous answers that you need to see a professional to decide on the type of vehicle you want to use to hold title to your rental properties (LLC, LLP, or Florida land trust), the general rule is that because of the negative tax provisions, you should never own real property in a corporation, whether it is and S corporation or a C corporation.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.
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