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    1 Reply Latest reply on Jan 5, 2010 6:36 PM by phanio

    Real Estate Investment and Development LLC or S Corp??????

    johnpaul01 Newbie
      I'm starting my own Real Estate Investment & Development company. I been in the busness for over 6 yrs but have always been 1099 and work under a broker. I have ask around and i'm getting mix reviews asfar as going LLC or S corp for my company. I do have a partner and most of our profits will be done in the real estate purchased of the investment property aswell on the rehab project or re sale. I was told that since i have a partner and due to the aquisition of real estate, that an LLC would be my better option. On the other hand i was told that an S corp would be better because if the market does pick up and our profits increase i would have to pay more on an LLC. I really need help so i can filled this and get started with my company, i just want to make sure i get the right guidance.


        • Re: Real Estate Investment and Development LLC or S Corp??????
          phanio Pioneer
          In regards to taxes and personal liability - LLCs and S-corps are pretty much the same. Both can have pass through income or both can designate to be taxed as a corporation.

          However, the s-corp does require a little more effort on your behalf - like regular meetings and filing business income taxes (even if pass through).

          The suggestion I would make is this: Some states do not allow businesses to be an LLC if they are required to be licensed (like in real estate). But, it depends on your state. Some states do not allow certain businesses to be LLCs - real estate may be one of them - but it depends on your state.

          I would suggest you take a little bit of time and buy the information you need from a lawyer or CPA familar with your state laws and your personal situation. Pay a little now - save a lot tomorrow!

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