Notes 📝 from video: - Don’t put property in S-Corp because if you want to take out the property it will trigger a taxable event aka large tax bill for you. - Don’t put property in S-Corp because after death, beneficiaries have to pay capital gains tax because of lack of “step up in basis” (when property is re-valued at a higher price). Options to do instead: - Use an LLC for rental properties which will receive “step-up in basis” for shares, of which there is an unlimited (unlike corp). - recommendation is to have each property in their own LLC for liability purposes. If you get sued, only that property is affected. - Speak to tax planner. For most real estate investors (landlords) an LLC is usually best, but for developers, flippers, brokers, or wholesalers an S-Corp might be best. Video summary starts at 16:55 in the video.
I don’t leave comments very often. Wow thank you for making these videos. I am taking over a family business and your videos have been helping me so much to wrap my brain around all of this. Great job on your videos clear and concise. 💯👍🏻
The question I have is what if you own "ABC LLC" but it is a S - Corp but your S - Corp owns your real estate business "XYZ LLC" as a normal LLC. How would the taxes work out, pro's and con's? Thank you.
This is all great information! What about holding companies, would someone need a holding company for all of these assumed accounts? Example: So if you own a brokerage as an s-corp, a construction company as an s-corp, 10 rental properties under separate LLC's, would you need a holding company? If so, would that be under an LLC or an s-corp? Maybe a continuation video on this would be more helpful. Thanks for all of your hard work and knowledge, we really appreciate it!
Not to mention that when you do that(transfer ownership to an llc) at least in Florida and get a deed you’ll be liable for documentary taxes , especially in the case of refinancing , there is a case out there on the issue , but most transferors have a mortgage on the property and do it because some refinance company which wants you to own it under an llc status .
An LLC is a legal structure not a tax structure. You can have as many "shareholders" as you want in an agreement, but that does not translate into any type of entity unless the person elects it. And there are limitations. Good info.
Hi, if my primary residence is in a living trust, but I’m going to be renting out my primary residence soon, do I still need to create an LLC for it now since it will be a rental? Or is it still fine if I only leave it in my living trust? Thanks in advance for the help!
How can I lease my rental property to my Partnership, LLC or my managing C-Corp Company if I do not use the whole property as business, only use one room to do my administrative books and business?
121 exclusion eligible rental that I want to remain the landlord. Is my only option to sell to an newly created S corp in order to keep it and take advantage of 121? I realize the step up in basis and liens may get complicated.
woah back up. are royalties and digital products sold after the fact passive income??? advertising income? youtube videos? books? are those passive income? I did a bit a research. I was hoping it was taxed at a lower rate but I guess it is all the same. darn it.
Thanks Karlton great and amazing information. Besides the LLC what structures and/or methods permit a step up in cost basis to a heir or beneficiary ( partnership, living trust, LLC, probate, C-corp, etc)?
Hola Karlton, I saw your video regarding having a rental property prior to setting up an LLC or any other corp. My question is planning on rental after my mortgage has been paid off at the end of this year. How may we transfer the property to be covered by the business?
Question: if i am considering rolling my properies into an LLC, Corp. or S-Corp doesn't the propertis have to be legally liable for the loan? Oppose to simply owning the properties and filing as one of the established entities. . .
LLC is mainly there to protect your personal assets from lawsuits or bankruptcy. Meaning if you a have a multi-unit and you get sued you might lose everything. But if you put each floor or each unit in different LLC you won’t lose everything.
If SCorp are filed on the 1120s; then what form is SMDE LLC filed? If it's Schedule C or Schedule E, I was told the SMDE LLC filing a Schedule C would trigger SE Tax (15.3%).
I am interested in a consultation with you Karlton. I have 2 offices in the socal area. I believe my Cerritos office is the closest to your office. Please provide me consultation information and availability. Thank you in advance
If the rental property (Airbnb) on my name but the operation is under S- Corp; on that case is it a taxable event if property is on living trust for children?
The step up in Basis is taken away from the property, but applied to the shares of the s-corp. they essentially pass the shares of the business which get stepped up
That is useless. The corporate properties will still have a gain to report at time of sale, which is taxable to the shareholders through the K1. The "value of the s-corp stocks" to the shareholders have nothing to do with the appreciated gain of the real estates which are corporate assets. And good luck selling your S-corp shares at appreciated value, the marketable value doesn't increase when the balance sheet stays at purchase price. What stepped up? lol
