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LLC corp buying land
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jakescia
Posted 3/9/2010 13:54 (#1112234 - in reply to #1112200)
Subject: RE: Lets tie down the communication, so we don't lose anything in the translation...........



Oskaloosa, Iowa 52577

I suggest you re-read my other posts...........

You keep using the terminology "LLC".........if you are referring to a regular C corp, and are merely using the wrong technical terminology-------that's fine.

If you really mean to use the term LLC as it refers to a legal LLC........and you intend on having that LLC elect to be taxed as a partnership.........then you need consultation, since what you are describing would cost you piles in unnecessary income/SE taxes.

If you use two LLCs, that is the same as two partnerships with the same partners.......accomplishes no tax savings.  Earned income is taxed to all partners under current tax law, and is also taxed as SE income.  Rents paid to the other partnership retains its character under 1402 and is taxed thereunder---------it will cost SE tax.

Adding an S corp to the mix..........if used as the tenant, then you get no tax breaks, all the income comes to your personal return, and if losses, then you could have basis problems, plus such could be wasted on kids' no/low income returns..........could be lots of hassle to manage the outcome, and from what you have indicated about your current tax person, it is logical that such person is not up to the task.

If S corp owns the land, and LLC is tenant, then back to what I said above.........get no benefits related to being "employees", and under current law all the partners get hit with SE taxes, or if losses, then the losses go to the kids' returns, and unless those kids have special income situations that are not typical, those losses would be wasted in a return that could not use them.

My final suggestion..........you need some good pro help.........your stated scenarios are ones that have too many downsides to them...........and the downsides are basic, elementary ones, which any decent tax person ought to easily handle.  Whomever is feeding you this LLC crap is not doing you a favor.

 



Edited by jakescia 3/9/2010 13:56
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