If the property is a small single rental property, LLC is probably your best bet on an all around basis.
This answer does not constitue legal advice, nor does it creat an attorney/client relationship. If you are seeking legal advice upon which you intend to rely, you should hire competent cousel familiar with this area of the law in your locale.
I would concur with my colleague that an LLC is probably the best way to go. You have the same liability protection of a Corp, without all of the formalities. Generally, I recommend LLCs for investment or passive income and S-Corps or C-Corps for Operations. Whatever entity you choose, it is important that you have agreements in place. For an LLC, you need an operating agreement whereas for a corporation you are looking at a shareholders agreement. You also want to have agreements in place that contemplate the four Ds (Death, Disability, Divorce and Dissolution) It is well worth your while to invest a little bit up front on getting these agreements in place then having to face a situation in the absence of one. As to you taxable income amount or threshold, consult a good CPA. Based upon a good business attorney's counsel and the input of a competent CPA, you will have approached the decision with due diligence.
Good luck with you venture!
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I agree with my colleagues. An LLC is an excellent tool to own and manage real estate.
From asset protection perspective, though, note that an LLC will isolate the risk generated by the property, but it will not protect your personal assets (bank and brokerage accounts, your primary residence and other investments). A plaintiff may always try to pierce the corporate veil by holding you personally liable by theories as negligence or gross negligence.
Depending on the value of (your stake in) the rental, the revenue it generates, and your total personal net worth, you may want to consider combing the LLC with a legal tool that was specifically designed for asset protection purposes such as a Family Limited Partnership filed in a state with strong charging order rules such as AZ.
It may seem overkill but I recommend you to seek advice with an experienced CPA, an insurance broker with expertise in real estate and an estate planning/asset protection attorney.
Douglass Lodmell is the nations #1 Asset Protection attorney and has clients in all 50 states, protecting over $4 Billion in client assets. Answers given by him in this forum do not establish an attorney-client relation. He advises to seek a specialized attorney in the area of your interest for legal representation.