“what corporation do you prefer for real estate?”--------->I guess needless to say, it depends on many variables/financial(taxation) situations; forming a C- or an S corp for an investment property is one way to reduce your liability. When a corp /LLC as a S –or C corp owns a property, a potential lawsuit from a tenant would be directed at the biz, not at you. This can protect valuable personal assets from a judgment. However, in transferring a property to a corp has some benefitsand disadvantages. Many banks have sale or transfer clauses in the mortgage contract and can call for the full mortgage amount if a property is transferred. While this clause is not always exercised by lenders, you need to carefully consider this factor.So as an owner of rental pty, you should weigh the pros and cons of transferring the rental pty to an S corp . ALSO, other types of protection,i..e, personal liability insurance, should be researched. Income made from the rental pty can be classified as passive income. You are better off to place the entire rental properties under the same LLC, or a Full Corp.The reasons for doing this the Tax relief, Insurance and Liability.It is cheaper from an Insurance point to have a LLC or CORP. insure all land and buildings than to do them seperate.I guess you need to consult a good Corporation Lawyer in your local area for more accurate info in detail. |