subject: Investment property for sale - Use LLC for Real Estate Investments [print this page] Investment property for sale - Use LLC for Real Estate Investments
Is usually not the best for your company can buy property. If your business is a C-Corporation, the company must pay taxes if the property is sold. To achieve such gains in your hands, you will pay a dividend themselves. This dividend is taxed again. So, they pay taxes twice on the profit from the sale of the building.
If the building has generated a tax loss to continue to make many buildings because of depreciation, this tax loss of your companyIncome. corporate income, but sometimes it is taxed at lower rates than individual rates. Therefore, the tax benefit would be less out of the building where, in a C-Corporation.
If the building has generated a capital gain tax, this income as part of corporate earnings and dividends will be taxed, taxed if the money distributed to owners. Often homes will generate more money as taxable income. In the form of organization that C is always more money for the ownerIncome tax, which would not be paid if it be set individually.
The same principles apply to your contribution to the subject of your Corporation. You will be taxed twice when you finally sell the property. Each property tax advantages available to the child may be less when corporate special rates. Taxable income from property will be taxed twice.
The analysis is different when an S-Corporation instead of a C Corporation However, it is stillgood idea to buy property in your S Corporation. If you change your opinion in the future, and wants to pull your house from the S Corporation, you will immediately be themselves subject to property taxes based on market value. Suppose you want to contribute to the property partnership to develop a property or for other reasons. You will not be able to obtain the property from S Corporation without income tax.In addition, you may not want such a great resource appreciation potential liabilities that may arise in your company, they are subject.
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