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What business structure to put farm in
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patt0463
Posted 2/20/2021 08:53 (#8846276 - in reply to #8845992)
Subject: Land in llc. Operate as S-corp


NE Oregon
Accountants here recommended having land held in llc. Obviously limits the liability to that land if something happens and a lawsuit is filed. Operating as a llc or S Corp has tax advantages. Operating entity treats land llc as a landlord in all respects.

You have to pay yourself a fair wage from the operating entity (s Corp or different llc) which is subject to payroll taxes. But the remains profits each year are not subject to self-employment taxes to contribute to social security and whatnot.

Profit on operating is taxed at your individual rate.

Landlord llc profit also passes through to you as individual. But can expense things as well.

If the land is held personally with a business entity paying rent, you personally also own the business entity. If you get sued for an accident on your land they can go after your personal assets, like your business entity. If land is in LLC, again, liability is confined to that land value.

I may have some things a little off, but that’s how I have it figured.
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